Correlation Between Lion Financial and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Lion Financial 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 Lion Financial and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Financial Group and Goldman Sachs Group, you can compare the effects of market volatilities on Lion Financial 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 Lion Financial with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Financial and Goldman Sachs.
Diversification Opportunities for Lion Financial and Goldman Sachs
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lion and Goldman is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lion Financial Group and Goldman Sachs Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Group and Lion Financial 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 Lion Financial Group 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 Group has no effect on the direction of Lion Financial i.e., Lion Financial and Goldman Sachs go up and down completely randomly.
Pair Corralation between Lion Financial and Goldman Sachs
Assuming the 90 days horizon Lion Financial is expected to generate 1.04 times less return on investment than Goldman Sachs. In addition to that, Lion Financial is 1.43 times more volatile than Goldman Sachs Group. It trades about 0.18 of its total potential returns per unit of risk. Goldman Sachs Group is currently generating about 0.27 per unit of volatility. If you would invest 50,895 in Goldman Sachs Group on September 4, 2024 and sell it today you would earn a total of 9,313 from holding Goldman Sachs Group or generate 18.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Financial Group vs. Goldman Sachs Group
Performance |
| Timeline |
| Lion Financial Group |
| Goldman Sachs Group |
Lion Financial and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Financial and Goldman Sachs
The main advantage of trading using opposite Lion Financial and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Financial 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.| Lion Financial vs. Goldman Sachs Group | Lion Financial vs. Applied Blockchain | Lion Financial vs. Hut 8 Corp | Lion Financial vs. Bitfarms |
| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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