Correlation Between Federated Global and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Federated Global 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 Federated Global and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Global Allocation and Goldman Sachs Technology, you can compare the effects of market volatilities on Federated Global 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 Federated Global with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Goldman Sachs.
Diversification Opportunities for Federated Global and Goldman Sachs
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FEDERATED and Goldman is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Allocation and Goldman Sachs Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Technology and Federated Global 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 Federated Global Allocation 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 Technology has no effect on the direction of Federated Global i.e., Federated Global and Goldman Sachs go up and down completely randomly.
Pair Corralation between Federated Global and Goldman Sachs
Assuming the 90 days horizon Federated Global Allocation is expected to under-perform the Goldman Sachs. But the mutual fund apears to be less risky and, when comparing its historical volatility, Federated Global Allocation is 2.19 times less risky than Goldman Sachs. The mutual fund trades about -0.31 of its potential returns per unit of risk. The Goldman Sachs Technology is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 3,598 in Goldman Sachs Technology on October 14, 2024 and sell it today you would lose (47.00) from holding Goldman Sachs Technology or give up 1.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Global Allocation vs. Goldman Sachs Technology
Performance |
| Timeline |
| Federated Global All |
| Goldman Sachs Technology |
Federated Global and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Global and Goldman Sachs
The main advantage of trading using opposite Federated Global and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global 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.| Federated Global vs. Federated Max Cap Index | Federated Global vs. Federated Kaufmann Fund | Federated Global vs. Federated Strategic Income | Federated Global vs. Federated Bond Fund |
| Goldman Sachs vs. Siit Large Cap | Goldman Sachs vs. Federated Global Allocation | Goldman Sachs vs. Balanced Allocation Fund | Goldman Sachs vs. Alternative Asset Allocation |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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