Correlation Between JPMorgan Chase and Goldbank Mining

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

By analyzing existing cross correlation between JPMorgan Chase Co and Goldbank Mining Corp, you can compare the effects of market volatilities on JPMorgan Chase and Goldbank Mining 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 JPMorgan Chase with a short position of Goldbank Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Goldbank Mining.

Diversification Opportunities for JPMorgan Chase and Goldbank Mining

0.65

Correlation Coefficient

JPMorgan Chase  Goldbank Mining

Poor diversification

The 3 months correlation between JPMorgan and Goldbank is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Goldbank Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldbank Mining Corp and JPMorgan Chase 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 JPMorgan Chase Co are associated (or correlated) with Goldbank Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldbank Mining Corp has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Goldbank Mining go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Goldbank Mining

Assuming the 90 days trading horizon JPMorgan Chase is expected to generate 5.73 times less return on investment than Goldbank Mining. But when comparing it to its historical volatility, JPMorgan Chase Co is 6.65 times less risky than Goldbank Mining. It trades about 0.11 of its potential returns per unit of risk. Goldbank Mining Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  16.00  in Goldbank Mining Corp on September 3, 2024 and sell it today you would earn a total of  7.00  from holding Goldbank Mining Corp or generate 43.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

JPMorgan Chase Co  vs.  Goldbank Mining Corp

JPMorgan Chase

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, JPMorgan Chase displayed solid returns over the last few months and may actually be approaching a breakup point.

Goldbank Mining Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goldbank Mining Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Goldbank Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JPMorgan Chase and Goldbank Mining

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

The idea behind JPMorgan Chase Co and Goldbank Mining Corp 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.