Correlation Between Goldman Sachs and Gmo Emerging

Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Gmo Emerging at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Goldman Sachs and Gmo Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Goldman Sachs Emerging and Gmo Emerging Markets, you can compare the effects of market volatilities on Goldman Sachs and Gmo Emerging and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Goldman Sachs with a short position of Gmo Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Gmo Emerging.

Diversification Opportunities for Goldman Sachs and Gmo Emerging

0.97

Correlation Coefficient

Goldman Sachs  Gmo Emerging

Almost no diversification

The 3 months correlation between Goldman and Gmo is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Emerging and Gmo Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Emerging Markets and Goldman Sachs is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Goldman Sachs Emerging are associated (or correlated) with Gmo Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Emerging Markets has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Gmo Emerging go up and down completely randomly.

Pair Corralation between Goldman Sachs and Gmo Emerging

Assuming the 90 days horizon Goldman Sachs Emerging is expected to generate 0.85 times more return on investment than Gmo Emerging. However, Goldman Sachs Emerging is 1.17 times less risky than Gmo Emerging. It trades about 0.23 of its potential returns per unit of risk. Gmo Emerging Markets is currently generating about 0.19 per unit of risk. If you would invest  911.00  in Goldman Sachs Emerging on May 5, 2025 and sell it today you would earn a total of  89.00  from holding Goldman Sachs Emerging or generate 9.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Goldman Sachs Emerging  vs.  Gmo Emerging Markets

Goldman Sachs Emerging

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Emerging are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Gmo Emerging Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gmo Emerging Markets are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Gmo Emerging may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Goldman Sachs and Gmo Emerging

The main advantage of trading using opposite Goldman Sachs and Gmo Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Gmo Emerging can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Gmo Emerging will offset losses from the drop in Gmo Emerging's long position.

The idea behind Goldman Sachs Emerging and Gmo Emerging Markets pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.