Correlation Between Fidelity Small and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Fidelity Small 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 Small 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 Small Cap and Goldman Sachs Clean, you can compare the effects of market volatilities on Fidelity Small 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 Small with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Small and Goldman Sachs.
Diversification Opportunities for Fidelity Small and Goldman Sachs
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fidelity and Goldman is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Small Cap and Goldman Sachs Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Clean and Fidelity Small 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 Small Cap 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 Clean has no effect on the direction of Fidelity Small i.e., Fidelity Small and Goldman Sachs go up and down completely randomly.
Pair Corralation between Fidelity Small and Goldman Sachs
Assuming the 90 days horizon Fidelity Small Cap is expected to generate 0.95 times more return on investment than Goldman Sachs. However, Fidelity Small Cap is 1.05 times less risky than Goldman Sachs. It trades about 0.04 of its potential returns per unit of risk. Goldman Sachs Clean is currently generating about -0.05 per unit of risk. If you would invest 1,861 in Fidelity Small Cap on October 24, 2024 and sell it today you would earn a total of 293.00 from holding Fidelity Small Cap or generate 15.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Small Cap vs. Goldman Sachs Clean
Performance |
| Timeline |
| Fidelity Small Cap |
| Goldman Sachs Clean |
Fidelity Small and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Small and Goldman Sachs
The main advantage of trading using opposite Fidelity Small and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Small 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.| Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Small Cap | Fidelity Small vs. Fidelity Mid Cap | Fidelity Small vs. Fidelity Advisor Value |
| Goldman Sachs vs. Fidelity Small Cap | Goldman Sachs vs. Amg River Road | Goldman Sachs vs. Fpa Queens Road | Goldman Sachs vs. Heartland Value Plus |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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