Correlation Between Golden Ocean and JPMorgan Chase

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

Diversification Opportunities for Golden Ocean and JPMorgan Chase

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Golden and JPMorgan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ocean Group and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase and Golden Ocean 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 Golden Ocean Group are associated (or correlated) with JPMorgan Chase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Chase has no effect on the direction of Golden Ocean i.e., Golden Ocean and JPMorgan Chase go up and down completely randomly.

Pair Corralation between Golden Ocean and JPMorgan Chase

Given the investment horizon of 90 days Golden Ocean Group is expected to generate 2.55 times more return on investment than JPMorgan Chase. However, Golden Ocean is 2.55 times more volatile than JPMorgan Chase Co. It trades about 0.18 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.41 per unit of risk. If you would invest  1,169  in Golden Ocean Group on December 29, 2023 and sell it today you would earn a total of  109.00  from holding Golden Ocean Group or generate 9.32% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Golden Ocean Group  vs.  JPMorgan Chase Co

 Performance 
       Timeline  
Golden Ocean Group 

Risk-Adjusted Performance

17 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Golden Ocean Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Golden Ocean disclosed solid returns over the last few months and may actually be approaching a breakup point.
JPMorgan Chase 

Risk-Adjusted Performance

25 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.

Golden Ocean and JPMorgan Chase Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Golden Ocean and JPMorgan Chase

The main advantage of trading using opposite Golden Ocean and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Ocean position performs unexpectedly, JPMorgan Chase 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 Chase will offset losses from the drop in JPMorgan Chase's long position.
The idea behind Golden Ocean Group and JPMorgan Chase Co 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 the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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