Correlation Between Firsthand Technology and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Firsthand Technology 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 Firsthand Technology and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firsthand Technology Opportunities and Goldman Sachs Inflation, you can compare the effects of market volatilities on Firsthand Technology 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 Firsthand Technology with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Technology and Goldman Sachs.
Diversification Opportunities for Firsthand Technology and Goldman Sachs
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Firsthand and Goldman is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Opportuni and Goldman Sachs Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Inflation and Firsthand Technology 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 Firsthand Technology Opportunities 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 Inflation has no effect on the direction of Firsthand Technology i.e., Firsthand Technology and Goldman Sachs go up and down completely randomly.
Pair Corralation between Firsthand Technology and Goldman Sachs
Assuming the 90 days horizon Firsthand Technology Opportunities is expected to under-perform the Goldman Sachs. In addition to that, Firsthand Technology is 6.53 times more volatile than Goldman Sachs Inflation. It trades about -0.04 of its total potential returns per unit of risk. Goldman Sachs Inflation is currently generating about 0.03 per unit of volatility. If you would invest 908.00 in Goldman Sachs Inflation on September 3, 2024 and sell it today you would earn a total of 52.00 from holding Goldman Sachs Inflation or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Technology Opportuni vs. Goldman Sachs Inflation
Performance |
| Timeline |
| Firsthand Technology |
| Goldman Sachs Inflation |
Firsthand Technology and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Technology and Goldman Sachs
The main advantage of trading using opposite Firsthand Technology and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Technology 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.The idea behind Firsthand Technology Opportunities and Goldman Sachs Inflation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Goldman Sachs vs. Towpath Technology | Goldman Sachs vs. Science Technology Fund | Goldman Sachs vs. Firsthand Technology Opportunities | Goldman Sachs vs. Mfs Technology Fund |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| 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 |