Correlation Between Fidelity International and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Fidelity International 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 Fidelity International and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity International Growth and Goldman Sachs Gqg, you can compare the effects of market volatilities on Fidelity International 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 Fidelity International with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity International and Goldman Sachs.
Diversification Opportunities for Fidelity International and Goldman Sachs
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fidelity and Goldman is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity International Growth and Goldman Sachs Gqg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Gqg and Fidelity International 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 Fidelity International Growth 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 Gqg has no effect on the direction of Fidelity International i.e., Fidelity International and Goldman Sachs go up and down completely randomly.
Pair Corralation between Fidelity International and Goldman Sachs
Assuming the 90 days horizon Fidelity International Growth is expected to under-perform the Goldman Sachs. But the mutual fund apears to be less risky and, when comparing its historical volatility, Fidelity International Growth is 1.17 times less risky than Goldman Sachs. The mutual fund trades about -0.3 of its potential returns per unit of risk. The Goldman Sachs Gqg is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 2,245 in Goldman Sachs Gqg on January 26, 2024 and sell it today you would lose (33.00) from holding Goldman Sachs Gqg or give up 1.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity International Growth vs. Goldman Sachs Gqg
Performance |
| Timeline |
| Fidelity International |
| Goldman Sachs Gqg |
Fidelity International and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity International and Goldman Sachs
The main advantage of trading using opposite Fidelity International and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity International 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 Fidelity International Growth and Goldman Sachs Gqg 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.
| Goldman Sachs vs. Growth Fund Of | Goldman Sachs vs. Washington Mutual Investors | Goldman Sachs vs. American Funds Fundamental | Goldman Sachs vs. New World Fund |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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