Correlation Between Goldman Sachs and Fpa Queens

Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Fpa Queens 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 Fpa Queens 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 Fpa Queens Road, you can compare the effects of market volatilities on Goldman Sachs and Fpa Queens 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 Fpa Queens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Fpa Queens.

Diversification Opportunities for Goldman Sachs and Fpa Queens

0.92

Correlation Coefficient

Goldman Sachs  Fpa Queens

Almost no diversification

The 3 months correlation between Goldman and Fpa is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Technology and Fpa Queens Road in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fpa Queens Road 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 Fpa Queens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fpa Queens Road has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Fpa Queens go up and down completely randomly.

Pair Corralation between Goldman Sachs and Fpa Queens

Assuming the 90 days horizon Goldman Sachs Technology is expected to under-perform the Fpa Queens. In addition to that, Goldman Sachs is 2.26 times more volatile than Fpa Queens Road. It trades about -0.01 of its total potential returns per unit of risk. Fpa Queens Road is currently generating about 0.07 per unit of volatility. If you would invest  4,164  in Fpa Queens Road on September 20, 2024 and sell it today you would earn a total of  46.00  from holding Fpa Queens Road or generate 1.1% return on investment over 90 days.

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

Goldman Sachs Technology  vs.  Fpa Queens Road

Goldman Sachs Technology

Risk-Adjusted Performance

7 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Technology are ranked lower than 7 (%) 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 January 2025.

Fpa Queens Road

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fpa Queens Road are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fpa Queens may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Goldman Sachs and Fpa Queens

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

The idea behind Goldman Sachs Technology and Fpa Queens Road 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.