Correlation Between Goldman Sachs and First Eagle
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and First Eagle 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 Goldman Sachs and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Clean and First Eagle Gold, you can compare the effects of market volatilities on Goldman Sachs and First Eagle 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 Goldman Sachs with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and First Eagle.
Diversification Opportunities for Goldman Sachs and First Eagle
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goldman and First is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Clean and First Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Gold and Goldman Sachs 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 Goldman Sachs Clean are associated (or correlated) with First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Gold has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and First Eagle go up and down completely randomly.
Pair Corralation between Goldman Sachs and First Eagle
Assuming the 90 days horizon Goldman Sachs is expected to generate 46.84 times less return on investment than First Eagle. But when comparing it to its historical volatility, Goldman Sachs Clean is 1.4 times less risky than First Eagle. It trades about 0.0 of its potential returns per unit of risk. First Eagle Gold is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,790 in First Eagle Gold on October 22, 2024 and sell it today you would earn a total of 654.00 from holding First Eagle Gold or generate 36.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Clean vs. First Eagle Gold
Performance |
| Timeline |
| Goldman Sachs Clean |
| First Eagle Gold |
Goldman Sachs and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and First Eagle
The main advantage of trading using opposite Goldman Sachs and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.| Goldman Sachs vs. Janus Global Technology | Goldman Sachs vs. Blackrock Science Technology | Goldman Sachs vs. Firsthand Technology Opportunities | Goldman Sachs vs. Pgim Jennison Technology |
| First Eagle vs. First Eagle Gold | First Eagle vs. First Eagle Gold | First Eagle vs. Franklin Gold Precious | First Eagle vs. First Eagle Global |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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