Correlation Between Jhancock Short and Goldman Sachs

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

By analyzing existing cross correlation between Jhancock Short Duration and Goldman Sachs Short, you can compare the effects of market volatilities on Jhancock Short 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 Jhancock Short with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Short and Goldman Sachs.

Diversification Opportunities for Jhancock Short and Goldman Sachs

0.8

Correlation Coefficient

Jhancock Short  Goldman Sachs

Very poor diversification

The 3 months correlation between Jhancock and Goldman is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Short Duration and Goldman Sachs Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Short and Jhancock Short 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 Jhancock Short Duration 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 Short has no effect on the direction of Jhancock Short i.e., Jhancock Short and Goldman Sachs go up and down completely randomly.

Pair Corralation between Jhancock Short and Goldman Sachs

Assuming the 90 days horizon Jhancock Short Duration is expected to under-perform the Goldman Sachs. But the mutual fund apears to be less risky and, when comparing its historical volatility, Jhancock Short Duration is 1.28 times less risky than Goldman Sachs. The mutual fund trades about -0.39 of its potential returns per unit of risk. The Goldman Sachs Short is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest  929.00  in Goldman Sachs Short on October 7, 2024 and sell it today you would lose (3.00) from holding Goldman Sachs Short or give up 0.32% of portfolio value over 90 days.

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

Jhancock Short Duration  vs.  Goldman Sachs Short

Jhancock Short Duration

Risk-Adjusted Performance

0 of 100

Very Weak

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

Goldman Sachs Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Short has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental 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 Jhancock Short and Goldman Sachs

The main advantage of trading using opposite Jhancock Short and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Short 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 Jhancock Short Duration and Goldman Sachs Short 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.