Correlation Between First Eagle and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both First Eagle 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 First Eagle and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Eagle Gold and Goldman Sachs Multi Manager, you can compare the effects of market volatilities on First Eagle 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 First Eagle with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Goldman Sachs.
Diversification Opportunities for First Eagle and Goldman Sachs
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Goldman is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold and Goldman Sachs Multi Manager in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Multi and First Eagle 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 First Eagle Gold 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 Multi has no effect on the direction of First Eagle i.e., First Eagle and Goldman Sachs go up and down completely randomly.
Pair Corralation between First Eagle and Goldman Sachs
Assuming the 90 days horizon First Eagle Gold is expected to generate 5.91 times more return on investment than Goldman Sachs. However, First Eagle is 5.91 times more volatile than Goldman Sachs Multi Manager. It trades about 0.39 of its potential returns per unit of risk. Goldman Sachs Multi Manager is currently generating about 0.12 per unit of risk. If you would invest 2,349 in First Eagle Gold on November 4, 2024 and sell it today you would earn a total of 233.00 from holding First Eagle Gold or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Gold vs. Goldman Sachs Multi Manager
Performance |
| Timeline |
| First Eagle Gold |
| Goldman Sachs Multi |
First Eagle and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Goldman Sachs
The main advantage of trading using opposite First Eagle and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle 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.| First Eagle vs. First Eagle Gold | First Eagle vs. First Eagle Gold | First Eagle vs. Franklin Gold Precious | First Eagle vs. First Eagle Global |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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