Correlation Between Goldman Sachs and JPMorgan Climate

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

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

Diversification Opportunities for Goldman Sachs and JPMorgan Climate

0.55

Correlation Coefficient

Goldman Sachs  JPMorgan Climate

Very weak diversification

The 3 months correlation between Goldman and JPMorgan is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Future and JPMorgan Climate Change in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Climate Change 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 Future are associated (or correlated) with JPMorgan Climate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Climate Change has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and JPMorgan Climate go up and down completely randomly.

Pair Corralation between Goldman Sachs and JPMorgan Climate

Given the investment horizon of 90 days Goldman Sachs is expected to generate 1.88 times less return on investment than JPMorgan Climate. But when comparing it to its historical volatility, Goldman Sachs Future is 1.13 times less risky than JPMorgan Climate. It trades about 0.06 of its potential returns per unit of risk. JPMorgan Climate Change is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,727  in JPMorgan Climate Change on September 14, 2024 and sell it today you would earn a total of  906.00  from holding JPMorgan Climate Change or generate 24.31% return on investment over 90 days.

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

Goldman Sachs Future  vs.  JPMorgan Climate Change

Goldman Sachs Future

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Future has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Etf's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

JPMorgan Climate Change

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan Climate Change has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, JPMorgan Climate is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Goldman Sachs and JPMorgan Climate

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

The idea behind Goldman Sachs Future and JPMorgan Climate Change 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 Global Correlations module to find global opportunities by holding instruments from different markets.