Correlation Between Fidelity Capital and Goldman Sachs

Can any of the company-specific risk be diversified away by investing in both Fidelity Capital 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 Capital 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 Capital Income and Goldman Sachs Financial, you can compare the effects of market volatilities on Fidelity Capital 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 Capital with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Capital and Goldman Sachs.

Diversification Opportunities for Fidelity Capital and Goldman Sachs

0.0

Correlation Coefficient

Fidelity Capital  Goldman Sachs

Pay attention - limited upside

The 3 months correlation between Fidelity and Goldman is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Capital Income and Goldman Sachs Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Financial and Fidelity Capital 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 Capital Income 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 Financial has no effect on the direction of Fidelity Capital i.e., Fidelity Capital and Goldman Sachs go up and down completely randomly.

Pair Corralation between Fidelity Capital and Goldman Sachs

Assuming the 90 days horizon Fidelity Capital is expected to generate 8.54 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Fidelity Capital Income is 48.28 times less risky than Goldman Sachs. It trades about 0.13 of its potential returns per unit of risk. Goldman Sachs Financial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  423.00  in Goldman Sachs Financial on October 24, 2024 and sell it today you would lose (323.00) from holding Goldman Sachs Financial or give up 76.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.82%
Values	Daily Returns

Fidelity Capital Income  vs.  Goldman Sachs Financial

Fidelity Capital Income

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Capital Income are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Fidelity Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Goldman Sachs Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Financial has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic 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 Capital and Goldman Sachs

The main advantage of trading using opposite Fidelity Capital and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Capital 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 Capital Income and Goldman Sachs Financial 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.