Correlation Between JPMorgan Climate and Goldman Sachs

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

Diversification Opportunities for JPMorgan Climate and Goldman Sachs

-0.51

Correlation Coefficient

JPMorgan Climate  Goldman Sachs

Excellent diversification

The 3 months correlation between JPMorgan and Goldman is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Climate Change and Goldman Sachs Innovate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Innovate and JPMorgan Climate 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 Climate Change 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 Innovate has no effect on the direction of JPMorgan Climate i.e., JPMorgan Climate and Goldman Sachs go up and down completely randomly.

Pair Corralation between JPMorgan Climate and Goldman Sachs

Given the investment horizon of 90 days JPMorgan Climate Change is expected to under-perform the Goldman Sachs. In addition to that, JPMorgan Climate is 1.02 times more volatile than Goldman Sachs Innovate. It trades about -0.04 of its total potential returns per unit of risk. Goldman Sachs Innovate is currently generating about 0.19 per unit of volatility. If you would invest  5,877  in Goldman Sachs Innovate on September 14, 2024 and sell it today you would earn a total of  582.00  from holding Goldman Sachs Innovate or generate 9.9% return on investment over 90 days.

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

JPMorgan Climate Change  vs.  Goldman Sachs Innovate

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 newest stock price agitation, may contribute to short-term losses for the retail investors.

Goldman Sachs Innovate

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Innovate are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with JPMorgan Climate and Goldman Sachs

The main advantage of trading using opposite JPMorgan Climate and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Climate 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 Climate Change and Goldman Sachs Innovate 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.