Correlation Between Goldman Sachs and BitFrontier Capital
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and BitFrontier Capital 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 Goldman Sachs and BitFrontier Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Goldman Sachs and BitFrontier Capital Holdings, you can compare the effects of market volatilities on Goldman Sachs and BitFrontier Capital 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 Goldman Sachs with a short position of BitFrontier Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and BitFrontier Capital.
Diversification Opportunities for Goldman Sachs and BitFrontier Capital
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldman and BitFrontier is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding The Goldman Sachs and BitFrontier Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFrontier Capital and Goldman Sachs 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 The Goldman Sachs are associated (or correlated) with BitFrontier Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFrontier Capital has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and BitFrontier Capital go up and down completely randomly.
Pair Corralation between Goldman Sachs and BitFrontier Capital
Assuming the 90 days horizon Goldman Sachs is expected to generate 230.75 times less return on investment than BitFrontier Capital. But when comparing it to its historical volatility, The Goldman Sachs is 18.87 times less risky than BitFrontier Capital. It trades about 0.02 of its potential returns per unit of risk. BitFrontier Capital Holdings is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 0.18 in BitFrontier Capital Holdings on September 1, 2024 and sell it today you would earn a total of 0.10 from holding BitFrontier Capital Holdings or generate 55.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Goldman Sachs vs. BitFrontier Capital Holdings
Performance |
| Timeline |
| Goldman Sachs |
| BitFrontier Capital |
Goldman Sachs and BitFrontier Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and BitFrontier Capital
The main advantage of trading using opposite Goldman Sachs and BitFrontier Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, BitFrontier Capital 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 BitFrontier Capital will offset losses from the drop in BitFrontier Capital's long position.The idea behind The Goldman Sachs and BitFrontier Capital Holdings 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.| BitFrontier Capital vs. XTRA Bitcoin | BitFrontier Capital vs. Coin Citadel | BitFrontier Capital vs. Dmg Blockchain Solutions | BitFrontier Capital vs. Argo Blockchain PLC |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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