Correlation Between Lion Group and Goldman Sachs

Can any of the company-specific risk be diversified away by investing in both Lion Group 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 Group 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 Group Holding and The Goldman Sachs, you can compare the effects of market volatilities on Lion Group 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 Group with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Group and Goldman Sachs.

Diversification Opportunities for Lion Group and Goldman Sachs

-0.56

Correlation Coefficient

Lion Group  Goldman Sachs

Excellent diversification

The 3 months correlation between Lion and Goldman is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Lion Group Holding and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs and Lion Group 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 Group Holding 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 Lion Group i.e., Lion Group and Goldman Sachs go up and down completely randomly.

Pair Corralation between Lion Group and Goldman Sachs

Given the investment horizon of 90 days Lion Group Holding is expected to under-perform the Goldman Sachs. In addition to that, Lion Group is 8.68 times more volatile than The Goldman Sachs. It trades about -0.03 of its total potential returns per unit of risk. The Goldman Sachs is currently generating about 0.12 per unit of volatility. If you would invest  2,275  in The Goldman Sachs on August 31, 2024 and sell it today you would earn a total of  135.00  from holding The Goldman Sachs or generate 5.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Lion Group Holding  vs.  The Goldman Sachs

Lion Group Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lion Group Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Goldman Sachs

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Goldman Sachs are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Lion Group and Goldman Sachs

The main advantage of trading using opposite Lion Group and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Group 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 Lion Group Holding and The Goldman Sachs 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.