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 ActiveBeta, 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

0.32

Correlation Coefficient

Chia  Goldman Sachs

Weak diversification

The 3 months correlation between Chia and Goldman is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Chia and Goldman Sachs ActiveBeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs ActiveBeta 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 ActiveBeta 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 5.55 times more volatile than Goldman Sachs ActiveBeta. It trades about -0.02 of its total potential returns per unit of risk. Goldman Sachs ActiveBeta is currently generating about 0.05 per unit of volatility. If you would invest  3,042  in Goldman Sachs ActiveBeta on October 12, 2024 and sell it today you would earn a total of  719.00  from holding Goldman Sachs ActiveBeta or generate 23.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	60.0%
Values	Daily Returns

Chia  vs.  Goldman Sachs ActiveBeta

Chia

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chia are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Chia exhibited solid returns over the last few months and may actually be approaching a breakup point.

Goldman Sachs ActiveBeta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs ActiveBeta has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking indicators, Goldman Sachs is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

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 ActiveBeta 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.