Correlation Between Fuller Thaler and Goldman Sachs

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

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

Diversification Opportunities for Fuller Thaler and Goldman Sachs

-0.56

Correlation Coefficient

Fuller Thaler  Goldman Sachs

Excellent diversification

The 3 months correlation between Fuller and Goldman is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Fuller Thaler Behavioral and Goldman Sachs Gqg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Gqg and Fuller Thaler 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 Fuller Thaler Behavioral 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 Gqg has no effect on the direction of Fuller Thaler i.e., Fuller Thaler and Goldman Sachs go up and down completely randomly.

Pair Corralation between Fuller Thaler and Goldman Sachs

Assuming the 90 days horizon Fuller Thaler Behavioral is expected to under-perform the Goldman Sachs. In addition to that, Fuller Thaler is 1.35 times more volatile than Goldman Sachs Gqg. It trades about -0.08 of its total potential returns per unit of risk. Goldman Sachs Gqg is currently generating about 0.16 per unit of volatility. If you would invest  1,959  in Goldman Sachs Gqg on December 29, 2024 and sell it today you would earn a total of  160.00  from holding Goldman Sachs Gqg or generate 8.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Fuller Thaler Behavioral  vs.  Goldman Sachs Gqg

Fuller Thaler Behavioral

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fuller Thaler Behavioral has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Fuller Thaler is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Goldman Sachs Gqg

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Gqg are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Fuller Thaler and Goldman Sachs

The main advantage of trading using opposite Fuller Thaler and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuller Thaler 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 Fuller Thaler Behavioral and Goldman Sachs Gqg 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.

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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.