Correlation Between GOLDMAN SACHS and Jack Nathan

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

By analyzing existing cross correlation between GOLDMAN SACHS CDR and Jack Nathan Medical, you can compare the effects of market volatilities on GOLDMAN SACHS and Jack Nathan 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 Jack Nathan. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDMAN SACHS and Jack Nathan.

Diversification Opportunities for GOLDMAN SACHS and Jack Nathan

0.11

Correlation Coefficient

GOLDMAN SACHS  Jack Nathan

Average diversification

The 3 months correlation between GOLDMAN and Jack is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS CDR and Jack Nathan Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jack Nathan Medical 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 CDR are associated (or correlated) with Jack Nathan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jack Nathan Medical has no effect on the direction of GOLDMAN SACHS i.e., GOLDMAN SACHS and Jack Nathan go up and down completely randomly.

Pair Corralation between GOLDMAN SACHS and Jack Nathan

Assuming the 90 days trading horizon GOLDMAN SACHS is expected to generate 172.27 times less return on investment than Jack Nathan. But when comparing it to its historical volatility, GOLDMAN SACHS CDR is 9.5 times less risky than Jack Nathan. It trades about 0.0 of its potential returns per unit of risk. Jack Nathan Medical is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2.00  in Jack Nathan Medical on December 20, 2024 and sell it today you would lose (0.50) from holding Jack Nathan Medical or give up 25.0% of portfolio value over 90 days.

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

GOLDMAN SACHS CDR  vs.  Jack Nathan Medical

GOLDMAN SACHS CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days GOLDMAN SACHS CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, GOLDMAN SACHS is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Jack Nathan Medical

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jack Nathan Medical are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Jack Nathan showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GOLDMAN SACHS and Jack Nathan

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

The idea behind GOLDMAN SACHS CDR and Jack Nathan Medical 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.