Correlation Between Goldman Sachs and First Investors
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and First Investors 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 Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Inflation and First Investors Select, you can compare the effects of market volatilities on Goldman Sachs and First Investors 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 Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and First Investors.
Diversification Opportunities for Goldman Sachs and First Investors
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldman and First is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Inflation and First Investors Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Investors Select 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 Inflation are associated (or correlated) with First Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Investors Select has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and First Investors go up and down completely randomly.
Pair Corralation between Goldman Sachs and First Investors
Assuming the 90 days horizon Goldman Sachs Inflation is expected to generate 0.14 times more return on investment than First Investors. However, Goldman Sachs Inflation is 7.07 times less risky than First Investors. It trades about 0.27 of its potential returns per unit of risk. First Investors Select is currently generating about -0.04 per unit of risk. If you would invest 949.00 in Goldman Sachs Inflation on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Goldman Sachs Inflation or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Inflation vs. First Investors Select
Performance |
| Timeline |
| Goldman Sachs Inflation |
| First Investors Select |
Goldman Sachs and First Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and First Investors
The main advantage of trading using opposite Goldman Sachs and First Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, First Investors 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 Investors will offset losses from the drop in First Investors' long position.| Goldman Sachs vs. Advent Claymore Convertible | Goldman Sachs vs. Allianzgi Convertible Income | Goldman Sachs vs. Putnam Convertible Incm Gwth | Goldman Sachs vs. Rationalpier 88 Convertible |
| First Investors vs. Guggenheim Managed Futures | First Investors vs. Goldman Sachs Inflation | First Investors vs. Short Duration Inflation | First Investors vs. Schwab Treasury Inflation |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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