Correlation Between Goldman Sachs and Spectrum Advisors

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Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Spectrum Advisors 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 Spectrum Advisors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Technology and Spectrum Advisors Preferred, you can compare the effects of market volatilities on Goldman Sachs and Spectrum Advisors 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 Spectrum Advisors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Spectrum Advisors.

Diversification Opportunities for Goldman Sachs and Spectrum Advisors

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between Goldman and Spectrum is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Technology and Spectrum Advisors Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum Advisors 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 Technology are associated (or correlated) with Spectrum Advisors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum Advisors has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Spectrum Advisors go up and down completely randomly.

Pair Corralation between Goldman Sachs and Spectrum Advisors

Assuming the 90 days horizon Goldman Sachs Technology is expected to generate 2.0 times more return on investment than Spectrum Advisors. However, Goldman Sachs is 2.0 times more volatile than Spectrum Advisors Preferred. It trades about 0.16 of its potential returns per unit of risk. Spectrum Advisors Preferred is currently generating about 0.21 per unit of risk. If you would invest  2,853  in Goldman Sachs Technology on May 25, 2025 and sell it today you would earn a total of  262.00  from holding Goldman Sachs Technology or generate 9.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Goldman Sachs Technology  vs.  Spectrum Advisors Preferred

 Performance 
       Timeline  
Goldman Sachs Technology 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Technology are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in September 2025.
Spectrum Advisors 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Spectrum Advisors Preferred are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Spectrum Advisors is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Goldman Sachs and Spectrum Advisors Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Goldman Sachs and Spectrum Advisors

The main advantage of trading using opposite Goldman Sachs and Spectrum Advisors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Spectrum Advisors 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 Spectrum Advisors will offset losses from the drop in Spectrum Advisors' long position.
The idea behind Goldman Sachs Technology and Spectrum Advisors Preferred 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.
Check out your portfolio center.
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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