Correlation Between Goldman Sachs and Fidelity Advisorâ®

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

By analyzing existing cross correlation between Goldman Sachs Technology and Fidelity Advisor Sustainable, you can compare the effects of market volatilities on Goldman Sachs and Fidelity Advisorâ® 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 Fidelity Advisorâ®. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Fidelity Advisorâ®.

Diversification Opportunities for Goldman Sachs and Fidelity Advisorâ®

0.22

Correlation Coefficient

Goldman Sachs  Fidelity Advisorâ®

Modest diversification

The 3 months correlation between Goldman and Fidelity is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Technology and Fidelity Advisor Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Sus 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 Technology are associated (or correlated) with Fidelity Advisorâ®. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Sus has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Fidelity Advisorâ® go up and down completely randomly.

Pair Corralation between Goldman Sachs and Fidelity Advisorâ®

Assuming the 90 days horizon Goldman Sachs Technology is expected to generate 2.13 times more return on investment than Fidelity Advisorâ®. However, Goldman Sachs is 2.13 times more volatile than Fidelity Advisor Sustainable. It trades about -0.11 of its potential returns per unit of risk. Fidelity Advisor Sustainable is currently generating about -0.27 per unit of risk. If you would invest  3,703  in Goldman Sachs Technology on October 9, 2024 and sell it today you would lose (142.00) from holding Goldman Sachs Technology or give up 3.83% of portfolio value over 90 days.

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

Goldman Sachs Technology  vs.  Fidelity Advisor Sustainable

Goldman Sachs Technology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Technology are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Fidelity Advisor Sus

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Goldman Sachs and Fidelity Advisorâ®

The main advantage of trading using opposite Goldman Sachs and Fidelity Advisorâ® positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Fidelity Advisorâ® 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 Fidelity Advisorâ® will offset losses from the drop in Fidelity Advisorâ®'s long position.

The idea behind Goldman Sachs Technology and Fidelity Advisor Sustainable 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.