Correlation Between Goldman Sachs and BFIT
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and BFIT 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 BFIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Future and BFIT, you can compare the effects of market volatilities on Goldman Sachs and BFIT 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 BFIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and BFIT.
Diversification Opportunities for Goldman Sachs and BFIT
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldman and BFIT is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Future and BFIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BFIT 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 Future are associated (or correlated) with BFIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BFIT has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and BFIT go up and down completely randomly.
Pair Corralation between Goldman Sachs and BFIT
Given the investment horizon of 90 days Goldman Sachs is expected to generate 1.65 times less return on investment than BFIT. But when comparing it to its historical volatility, Goldman Sachs Future is 1.12 times less risky than BFIT. It trades about 0.03 of its potential returns per unit of risk. BFIT is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,155 in BFIT on August 23, 2024 and sell it today you would earn a total of 130.00 from holding BFIT or generate 6.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 32.26% |
| Values | Daily Returns |
Goldman Sachs Future vs. BFIT
Performance |
| Timeline |
| Goldman Sachs Future |
| BFIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Goldman Sachs and BFIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and BFIT
The main advantage of trading using opposite Goldman Sachs and BFIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, BFIT 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 BFIT will offset losses from the drop in BFIT's long position.| Goldman Sachs vs. iShares Exponential Technologies | Goldman Sachs vs. Invesco Solar ETF | Goldman Sachs vs. First Trust NASDAQ | Goldman Sachs vs. Global X Autonomous |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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