Correlation Between Fisher Investments and Goldman Sachs

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

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

Diversification Opportunities for Fisher Investments and Goldman Sachs

-0.14

Correlation Coefficient

Fisher Investments  Goldman Sachs

Good diversification

The 3 months correlation between Fisher and Goldman is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Small Cap and Goldman Sachs Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Emerging and Fisher Investments 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 Fisher Small Cap 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 Emerging has no effect on the direction of Fisher Investments i.e., Fisher Investments and Goldman Sachs go up and down completely randomly.

Pair Corralation between Fisher Investments and Goldman Sachs

Assuming the 90 days horizon Fisher Small Cap is expected to generate 1.77 times more return on investment than Goldman Sachs. However, Fisher Investments is 1.77 times more volatile than Goldman Sachs Emerging. It trades about 0.08 of its potential returns per unit of risk. Goldman Sachs Emerging is currently generating about -0.14 per unit of risk. If you would invest  1,216  in Fisher Small Cap on October 23, 2024 and sell it today you would earn a total of  73.00  from holding Fisher Small Cap or generate 6.0% return on investment over 90 days.

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

Fisher Small Cap  vs.  Goldman Sachs Emerging

Fisher Investments

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fisher Small Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Fisher Investments may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Goldman Sachs Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Emerging has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Fisher Investments and Goldman Sachs

The main advantage of trading using opposite Fisher Investments and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Investments 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 Fisher Small Cap and Goldman Sachs Emerging 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.