Correlation Between Fidelity National and Goldman Sachs

Can any of the company-specific risk be diversified away by investing in both Fidelity National 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 Fidelity National and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fidelity National Information and The Goldman Sachs, you can compare the effects of market volatilities on Fidelity National 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 Fidelity National with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Goldman Sachs.

Diversification Opportunities for Fidelity National and Goldman Sachs

-0.3

Correlation Coefficient

Fidelity National  Goldman Sachs

Very good diversification

The 3 months correlation between Fidelity and Goldman is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs and Fidelity National 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 Fidelity National Information 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 has no effect on the direction of Fidelity National i.e., Fidelity National and Goldman Sachs go up and down completely randomly.

Pair Corralation between Fidelity National and Goldman Sachs

Assuming the 90 days trading horizon Fidelity National is expected to generate 1.58 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Fidelity National Information is 1.02 times less risky than Goldman Sachs. It trades about 0.07 of its potential returns per unit of risk. The Goldman Sachs is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  5,428  in The Goldman Sachs on December 3, 2024 and sell it today you would earn a total of  6,591  from holding The Goldman Sachs or generate 121.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.39%
Values	Daily Returns

Fidelity National Information  vs.  The Goldman Sachs

Fidelity National

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity National Information has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Goldman Sachs

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Goldman Sachs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fidelity National and Goldman Sachs

The main advantage of trading using opposite Fidelity National and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National 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 Fidelity National Information and The Goldman Sachs 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.