Correlation Between Goldman Sachs and Formidable ETF

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

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

Diversification Opportunities for Goldman Sachs and Formidable ETF

0.89

Correlation Coefficient

Goldman Sachs  Formidable ETF

Very poor diversification

The 3 months correlation between Goldman and Formidable is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Access and Formidable ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formidable ETF 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 Access are associated (or correlated) with Formidable ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formidable ETF has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Formidable ETF go up and down completely randomly.

Pair Corralation between Goldman Sachs and Formidable ETF

Given the investment horizon of 90 days Goldman Sachs is expected to generate 10.31 times less return on investment than Formidable ETF. But when comparing it to its historical volatility, Goldman Sachs Access is 47.92 times less risky than Formidable ETF. It trades about 1.0 of its potential returns per unit of risk. Formidable ETF is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2,117  in Formidable ETF on May 2, 2025 and sell it today you would earn a total of  215.00  from holding Formidable ETF or generate 10.16% return on investment over 90 days.

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

Goldman Sachs Access  vs.  Formidable ETF

Goldman Sachs Access

Risk-Adjusted Performance

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Access are ranked lower than 78 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Formidable ETF

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Formidable ETF are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Formidable ETF may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Goldman Sachs and Formidable ETF

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

The idea behind Goldman Sachs Access and Formidable ETF 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.