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 Short, 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
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bitcoin and GOLDMAN is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Goldman Sachs Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Short 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 Short 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 generate 23.58 times more return on investment than Goldman Sachs. However, Bitcoin is 23.58 times more volatile than Goldman Sachs Short. It trades about 0.15 of its potential returns per unit of risk. Goldman Sachs Short is currently generating about 0.21 per unit of risk. If you would invest 9,776,949 in Bitcoin on October 20, 2024 and sell it today you would earn a total of 658,751 from holding Bitcoin or generate 6.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bitcoin vs. Goldman Sachs Short
Performance |
| Timeline |
| Bitcoin |
| Goldman Sachs Short |
Bitcoin and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
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 Short 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. Saat Defensive Strategy | Goldman Sachs vs. Black Oak Emerging | Goldman Sachs vs. Western Assets Emerging | Goldman Sachs vs. Mid Cap 15x Strategy |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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