Correlation Between Smallcap Fund and Goldman Sachs

Can any of the company-specific risk be diversified away by investing in both Smallcap Fund and Goldman Sachs 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 Smallcap Fund and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Smallcap Fund Fka and Goldman Sachs Technology, you can compare the effects of market volatilities on Smallcap Fund and Goldman Sachs 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 Smallcap Fund with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap Fund and Goldman Sachs.

Diversification Opportunities for Smallcap Fund and Goldman Sachs

0.87

Correlation Coefficient

Smallcap Fund  Goldman Sachs

Very poor diversification

The 3 months correlation between Smallcap and Goldman is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap Fund Fka and Goldman Sachs Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Technology and Smallcap Fund 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 Smallcap Fund Fka are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Technology has no effect on the direction of Smallcap Fund i.e., Smallcap Fund and Goldman Sachs go up and down completely randomly.

Pair Corralation between Smallcap Fund and Goldman Sachs

Assuming the 90 days horizon Smallcap Fund is expected to generate 1.05 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Smallcap Fund Fka is 1.03 times less risky than Goldman Sachs. It trades about 0.22 of its potential returns per unit of risk. Goldman Sachs Technology is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2,793  in Goldman Sachs Technology on May 21, 2025 and sell it today you would earn a total of  358.00  from holding Goldman Sachs Technology or generate 12.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Smallcap Fund Fka  vs.  Goldman Sachs Technology

Smallcap Fund Fka

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Smallcap Fund Fka are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Smallcap Fund may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Goldman Sachs Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Technology are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Goldman Sachs showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Smallcap Fund and Goldman Sachs

The main advantage of trading using opposite Smallcap Fund and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smallcap Fund position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.

The idea behind Smallcap Fund Fka and Goldman Sachs Technology 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.