Correlation Between JPMorgan Chase and Goldman Sachs

Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Trust, you can compare the effects of market volatilities on JPMorgan Chase and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Goldman Sachs.

Diversification Opportunities for JPMorgan Chase and Goldman Sachs

0.0

Correlation Coefficient

JPMorgan Chase  Goldman Sachs

Pay attention - limited upside

The 3 months correlation between JPMorgan and Goldman is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Goldman Sachs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Trust 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Trust has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Goldman Sachs go up and down completely randomly.

Pair Corralation between JPMorgan Chase and Goldman Sachs

If you would invest  23,717  in JPMorgan Chase Co on December 22, 2024 and sell it today you would earn a total of  446.00  from holding JPMorgan Chase Co or generate 1.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

JPMorgan Chase Co  vs.  Goldman Sachs Trust

JPMorgan Chase

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Chase Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, JPMorgan Chase is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Goldman Sachs Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goldman Sachs Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JPMorgan Chase and Goldman Sachs

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

The idea behind JPMorgan Chase Co and Goldman Sachs Trust 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.