Correlation Between Chia and Goldman Sachs

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

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

Diversification Opportunities for Chia and Goldman Sachs

-0.42

Correlation Coefficient

Chia  Goldman Sachs

Very good diversification

The 3 months correlation between Chia and Goldman is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Chia and Goldman Sachs MarketBeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs MarketBeta and Chia 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 Chia 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 MarketBeta has no effect on the direction of Chia i.e., Chia and Goldman Sachs go up and down completely randomly.

Pair Corralation between Chia and Goldman Sachs

Assuming the 90 days trading horizon Chia is expected to under-perform the Goldman Sachs. In addition to that, Chia is 6.64 times more volatile than Goldman Sachs MarketBeta. It trades about -0.08 of its total potential returns per unit of risk. Goldman Sachs MarketBeta is currently generating about 0.1 per unit of volatility. If you would invest  4,380  in Goldman Sachs MarketBeta on December 19, 2024 and sell it today you would earn a total of  244.00  from holding Goldman Sachs MarketBeta or generate 5.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.65%
Values	Daily Returns

Chia  vs.  Goldman Sachs MarketBeta

Chia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chia 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 technical 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 Chia shareholders.

Goldman Sachs MarketBeta

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs MarketBeta are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Goldman Sachs is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Chia and Goldman Sachs

The main advantage of trading using opposite Chia and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia 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 Chia and Goldman Sachs MarketBeta 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.