Correlation Between Bitcoin and Goldman Sachs

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

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

Diversification Opportunities for Bitcoin and Goldman Sachs

0.14

Correlation Coefficient

Bitcoin  Goldman Sachs

Average diversification

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

Pair Corralation between Bitcoin and Goldman Sachs

Assuming the 90 days trading horizon Bitcoin is expected to under-perform the Goldman Sachs. In addition to that, Bitcoin is 6.03 times more volatile than Goldman Sachs Absolute. It trades about -0.09 of its total potential returns per unit of risk. Goldman Sachs Absolute is currently generating about 0.04 per unit of volatility. If you would invest  920.00  in Goldman Sachs Absolute on December 22, 2024 and sell it today you would earn a total of  8.00  from holding Goldman Sachs Absolute or generate 0.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Bitcoin  vs.  Goldman Sachs Absolute

Bitcoin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bitcoin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Bitcoin shareholders.

Goldman Sachs Absolute

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Absolute are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bitcoin and Goldman Sachs

The main advantage of trading using opposite Bitcoin and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin 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 Bitcoin and Goldman Sachs Absolute 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.