Correlation Between H FARM and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both H FARM 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 H FARM and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H FARM SPA and The Goldman Sachs, you can compare the effects of market volatilities on H FARM 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 H FARM with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of H FARM and Goldman Sachs.
Diversification Opportunities for H FARM and Goldman Sachs
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 5JQ and Goldman is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding H FARM SPA and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs and H FARM 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 H FARM SPA 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 has no effect on the direction of H FARM i.e., H FARM and Goldman Sachs go up and down completely randomly.
Pair Corralation between H FARM and Goldman Sachs
Assuming the 90 days horizon H FARM SPA is expected to under-perform the Goldman Sachs. In addition to that, H FARM is 1.4 times more volatile than The Goldman Sachs. It trades about -0.05 of its total potential returns per unit of risk. The Goldman Sachs is currently generating about 0.28 per unit of volatility. If you would invest 47,300 in The Goldman Sachs on September 3, 2024 and sell it today you would earn a total of 10,630 from holding The Goldman Sachs or generate 22.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
H FARM SPA vs. The Goldman Sachs
Performance |
| Timeline |
| H FARM SPA |
| Goldman Sachs |
H FARM and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H FARM and Goldman Sachs
The main advantage of trading using opposite H FARM and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H FARM 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.| H FARM vs. ADRIATIC METALS LS 013355 | H FARM vs. GALENA MINING LTD | H FARM vs. Sunny Optical Technology | H FARM vs. GREENX METALS LTD |
| Goldman Sachs vs. Fevertree Drinks PLC | Goldman Sachs vs. Seven West Media | Goldman Sachs vs. MOLSON RS BEVERAGE | Goldman Sachs vs. Ubisoft Entertainment SA |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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