Correlation Between Goldman Sachs and Jpmorgan

Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Jpmorgan 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 Jpmorgan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Goldman Sachs Access and Jpmorgan Equity Fund, you can compare the effects of market volatilities on Goldman Sachs and Jpmorgan 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 Jpmorgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Jpmorgan.

Diversification Opportunities for Goldman Sachs and Jpmorgan

0.75

Correlation Coefficient

Goldman Sachs  Jpmorgan

Poor diversification

The 3 months correlation between Goldman and Jpmorgan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Access and Jpmorgan Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Equity 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 Access are associated (or correlated) with Jpmorgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Equity has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Jpmorgan go up and down completely randomly.

Pair Corralation between Goldman Sachs and Jpmorgan

Given the investment horizon of 90 days Goldman Sachs Access is expected to generate 0.31 times more return on investment than Jpmorgan. However, Goldman Sachs Access is 3.19 times less risky than Jpmorgan. It trades about 0.07 of its potential returns per unit of risk. Jpmorgan Equity Fund is currently generating about -0.15 per unit of risk. If you would invest  9,967  in Goldman Sachs Access on January 26, 2024 and sell it today you would earn a total of  36.00  from holding Goldman Sachs Access or generate 0.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Goldman Sachs Access  vs.  Jpmorgan Equity Fund

Goldman Sachs Access

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Access are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Jpmorgan Equity

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Equity Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Jpmorgan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Goldman Sachs and Jpmorgan

The main advantage of trading using opposite Goldman Sachs and Jpmorgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Jpmorgan 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 Jpmorgan will offset losses from the drop in Jpmorgan's long position.

The idea behind Goldman Sachs Access and Jpmorgan Equity Fund 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.