Correlation Between Goldman Sachs and JPMorgan Ultra

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

By analyzing existing cross correlation between Goldman Sachs Access and JPMorgan Ultra Short Income, you can compare the effects of market volatilities on Goldman Sachs and JPMorgan Ultra 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 JPMorgan Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and JPMorgan Ultra.

Diversification Opportunities for Goldman Sachs and JPMorgan Ultra

1.0

Correlation Coefficient

Goldman Sachs  JPMorgan Ultra

No risk reduction

The 3 months correlation between Goldman and JPMorgan is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Access and JPMorgan Ultra Short Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Ultra Short 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 Access are associated (or correlated) with JPMorgan Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Ultra Short has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and JPMorgan Ultra go up and down completely randomly.

Pair Corralation between Goldman Sachs and JPMorgan Ultra

Given the investment horizon of 90 days Goldman Sachs is expected to generate 1.12 times less return on investment than JPMorgan Ultra. In addition to that, Goldman Sachs is 1.42 times more volatile than JPMorgan Ultra Short Income. It trades about 0.36 of its total potential returns per unit of risk. JPMorgan Ultra Short Income is currently generating about 0.57 per unit of volatility. If you would invest  4,562  in JPMorgan Ultra Short Income on June 26, 2024 and sell it today you would earn a total of  508.00  from holding JPMorgan Ultra Short Income or generate 11.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.8%
Values	Daily Returns

Goldman Sachs Access  vs.  JPMorgan Ultra Short Income

Goldman Sachs Access

Risk-Adjusted Performance

83 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Access are ranked lower than 83 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

JPMorgan Ultra Short

Risk-Adjusted Performance

62 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in JPMorgan Ultra Short Income are ranked lower than 62 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, JPMorgan Ultra is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Goldman Sachs and JPMorgan Ultra

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

The idea behind Goldman Sachs Access and JPMorgan Ultra Short Income 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 Anywhere module to track or share privately all of your investments from the convenience of any device.