Correlation Between WisdomTree Aluminium and Goldman Sachs

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

By analyzing existing cross correlation between WisdomTree Aluminium 2x and Goldman Sachs Access, you can compare the effects of market volatilities on WisdomTree Aluminium 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 WisdomTree Aluminium with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Aluminium and Goldman Sachs.

Diversification Opportunities for WisdomTree Aluminium and Goldman Sachs

0.85

Correlation Coefficient

WisdomTree Aluminium  Goldman Sachs

Very poor diversification

The 3 months correlation between WisdomTree and Goldman is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Aluminium 2x and Goldman Sachs Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Access and WisdomTree Aluminium 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 WisdomTree Aluminium 2x 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 Access has no effect on the direction of WisdomTree Aluminium i.e., WisdomTree Aluminium and Goldman Sachs go up and down completely randomly.

Pair Corralation between WisdomTree Aluminium and Goldman Sachs

Assuming the 90 days trading horizon WisdomTree Aluminium 2x is expected to generate 11.72 times more return on investment than Goldman Sachs. However, WisdomTree Aluminium is 11.72 times more volatile than Goldman Sachs Access. It trades about 0.15 of its potential returns per unit of risk. Goldman Sachs Access is currently generating about 0.22 per unit of risk. If you would invest  184.00  in WisdomTree Aluminium 2x on April 23, 2025 and sell it today you would earn a total of  33.00  from holding WisdomTree Aluminium 2x or generate 17.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

WisdomTree Aluminium 2x  vs.  Goldman Sachs Access

WisdomTree Aluminium

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Aluminium 2x are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, WisdomTree Aluminium unveiled solid returns over the last few months and may actually be approaching a breakup point.

Goldman Sachs Access

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Access are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Goldman Sachs is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with WisdomTree Aluminium and Goldman Sachs

The main advantage of trading using opposite WisdomTree Aluminium and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Aluminium 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 WisdomTree Aluminium 2x and Goldman Sachs Access 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..