Correlation Between Goldman Sachs and First Trust
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and First Trust 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 Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs ActiveBeta and First Trust Japan, you can compare the effects of market volatilities on Goldman Sachs and First Trust 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 Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and First Trust.
Diversification Opportunities for Goldman Sachs and First Trust
0.55 | Correlation Coefficient |
Very weak 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 ActiveBeta and First Trust Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Japan 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 ActiveBeta are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Japan has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and First Trust go up and down completely randomly.
Pair Corralation between Goldman Sachs and First Trust
Given the investment horizon of 90 days Goldman Sachs ActiveBeta is expected to under-perform the First Trust. But the etf apears to be less risky and, when comparing its historical volatility, Goldman Sachs ActiveBeta is 1.39 times less risky than First Trust. The etf trades about -0.12 of its potential returns per unit of risk. The First Trust Japan is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,169 in First Trust Japan on September 3, 2024 and sell it today you would earn a total of 148.00 from holding First Trust Japan or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs ActiveBeta vs. First Trust Japan
Performance |
| Timeline |
| Goldman Sachs ActiveBeta |
| First Trust Japan |
Goldman Sachs and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and First Trust
The main advantage of trading using opposite Goldman Sachs and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, First Trust 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 Trust will offset losses from the drop in First Trust's long position.| Goldman Sachs vs. Vanguard FTSE Pacific | Goldman Sachs vs. Vanguard FTSE Emerging | Goldman Sachs vs. Vanguard FTSE All World | Goldman Sachs vs. Vanguard FTSE Developed |
| First Trust vs. First Trust United | First Trust vs. First Trust Asia | First Trust vs. First Trust Germany | First Trust vs. First Trust Switzerland |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |