Correlation Between Hive and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Hive 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 Hive and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hive and Goldman Sachs Growth, you can compare the effects of market volatilities on Hive 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 Hive with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hive and Goldman Sachs.
Diversification Opportunities for Hive and Goldman Sachs
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hive and Goldman is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hive and Goldman Sachs Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Growth and Hive 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 Hive 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 Growth has no effect on the direction of Hive i.e., Hive and Goldman Sachs go up and down completely randomly.
Pair Corralation between Hive and Goldman Sachs
Assuming the 90 days trading horizon Hive is expected to under-perform the Goldman Sachs. In addition to that, Hive is 5.76 times more volatile than Goldman Sachs Growth. It trades about -0.17 of its total potential returns per unit of risk. Goldman Sachs Growth is currently generating about -0.19 per unit of volatility. If you would invest 1,475 in Goldman Sachs Growth on January 26, 2024 and sell it today you would lose (67.00) from holding Goldman Sachs Growth or give up 4.54% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Hive vs. Goldman Sachs Growth
Performance |
Timeline |
Hive |
Goldman Sachs Growth |
Hive and Goldman Sachs Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hive and Goldman Sachs
The main advantage of trading using opposite Hive and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hive 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 Hive and Goldman Sachs Growth 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.Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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