Correlation Between Goldman Sachs and SAIHEAT
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and SAIHEAT 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 SAIHEAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Group and SAIHEAT Limited, you can compare the effects of market volatilities on Goldman Sachs and SAIHEAT 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 SAIHEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and SAIHEAT.
Diversification Opportunities for Goldman Sachs and SAIHEAT
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and SAIHEAT is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and SAIHEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIHEAT Limited 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 Goldman Sachs Group are associated (or correlated) with SAIHEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIHEAT Limited has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and SAIHEAT go up and down completely randomly.
Pair Corralation between Goldman Sachs and SAIHEAT
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 0.19 times more return on investment than SAIHEAT. However, Goldman Sachs Group is 5.38 times less risky than SAIHEAT. It trades about 0.23 of its potential returns per unit of risk. SAIHEAT Limited is currently generating about -0.04 per unit of risk. If you would invest 51,720 in Goldman Sachs Group on August 24, 2024 and sell it today you would earn a total of 8,558 from holding Goldman Sachs Group or generate 16.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 43.48% |
| Values | Daily Returns |
Goldman Sachs Group vs. SAIHEAT Limited
Performance |
| Timeline |
| Goldman Sachs Group |
| SAIHEAT Limited |
Goldman Sachs and SAIHEAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and SAIHEAT
The main advantage of trading using opposite Goldman Sachs and SAIHEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, SAIHEAT 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 SAIHEAT will offset losses from the drop in SAIHEAT's long position.| Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup | Goldman Sachs vs. American Express |
| SAIHEAT vs. Goldman Sachs Group | SAIHEAT vs. Moelis Co | SAIHEAT vs. Morgan Stanley | SAIHEAT vs. Stifel Financial |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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