Correlation Between Hudson Capital and Goldman Sachs

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Can any of the company-specific risk be diversified away by investing in both Hudson Capital 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 Hudson Capital and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Capital and Goldman Sachs Group, you can compare the effects of market volatilities on Hudson Capital 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 Hudson Capital with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Capital and Goldman Sachs.

Diversification Opportunities for Hudson Capital and Goldman Sachs

0.35
  Correlation Coefficient

Weak diversification

The 3 months correlation between Hudson and Goldman is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Capital Inc 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 Hudson Capital 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 Hudson Capital 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 Hudson Capital i.e., Hudson Capital and Goldman Sachs go up and down completely randomly.

Pair Corralation between Hudson Capital and Goldman Sachs

Given the investment horizon of 90 days Hudson Capital is expected to generate 8.97 times more return on investment than Goldman Sachs. However, Hudson Capital is 8.97 times more volatile than Goldman Sachs Group. It trades about 0.04 of its potential returns per unit of risk. Goldman Sachs Group is currently generating about 0.06 per unit of risk. If you would invest  105.00  in Hudson Capital on April 8, 2022 and sell it today you would earn a total of  61.00  from holding Hudson Capital or generate 58.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy94.54%
ValuesDaily Returns

Hudson Capital Inc  vs.  Goldman Sachs Group

 Performance (%) 
      Timeline 
Hudson Capital 
Hudson Performance
0 of 100
Over the last 90 days Hudson Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in August 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
Goldman Sachs Group 
Goldman Performance
0 of 100
Over the last 90 days Goldman Sachs Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Goldman Sachs is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0269
Payout Ratio
0.16
Forward Annual Dividend Rate
8.0
Dividend Date
2022-06-29
Ex Dividend Date
2022-05-31

Goldman Price Channel

Hudson Capital and Goldman Sachs Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Hudson Capital and Goldman Sachs

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

Hudson Capital

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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Hudson Capital as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Hudson Capital's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Hudson Capital's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Hudson Capital.
The idea behind Hudson Capital and Goldman Sachs Group 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.
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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