Correlation Between Vanguard Health and Goldman Sachs

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

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

Diversification Opportunities for Vanguard Health and Goldman Sachs

0.92

Correlation Coefficient

Vanguard Health  Goldman Sachs

Almost no diversification

The 3 months correlation between Vanguard and Goldman is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Health Care and Goldman Sachs ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs ETF and Vanguard Health 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 Vanguard Health Care 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 ETF has no effect on the direction of Vanguard Health i.e., Vanguard Health and Goldman Sachs go up and down completely randomly.

Pair Corralation between Vanguard Health and Goldman Sachs

Considering the 90-day investment horizon Vanguard Health Care is expected to generate 0.99 times more return on investment than Goldman Sachs. However, Vanguard Health Care is 1.01 times less risky than Goldman Sachs. It trades about 0.13 of its potential returns per unit of risk. Goldman Sachs ETF is currently generating about 0.08 per unit of risk. If you would invest  24,645  in Vanguard Health Care on July 4, 2025 and sell it today you would earn a total of  2,024  from holding Vanguard Health Care or generate 8.21% return on investment over 90 days.

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

Vanguard Health Care  vs.  Goldman Sachs ETF

Vanguard Health Care

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Health Care are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical indicators, Vanguard Health may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Goldman Sachs ETF

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs ETF are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Vanguard Health and Goldman Sachs

The main advantage of trading using opposite Vanguard Health and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Health 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 Vanguard Health Care and Goldman Sachs ETF 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..