Correlation Between Goldman Sachs and Fidelity Covington

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

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

Diversification Opportunities for Goldman Sachs and Fidelity Covington

0.0

Correlation Coefficient

Goldman Sachs  Fidelity Covington

Pay attention - limited upside

The 3 months correlation between Goldman and Fidelity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs and Fidelity Covington Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Covington Trust 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 are associated (or correlated) with Fidelity Covington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Covington Trust has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Fidelity Covington go up and down completely randomly.

Pair Corralation between Goldman Sachs and Fidelity Covington

If you would invest (100.00) in Goldman Sachs on December 4, 2024 and sell it today you would earn a total of  100.00  from holding Goldman Sachs or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Goldman Sachs  vs.  Fidelity Covington Trust

Goldman Sachs

Risk-Adjusted Performance

Very Weak

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

Fidelity Covington Trust

Risk-Adjusted Performance

Weak

Over the last 90 days Fidelity Covington Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Fidelity Covington is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Goldman Sachs and Fidelity Covington

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

The idea behind Goldman Sachs and Fidelity Covington Trust 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.