Correlation Between British American and Jupiter Fund
Can any of the company-specific risk be diversified away by investing in both British American and Jupiter Fund 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 British American and Jupiter Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British American Tobacco and Jupiter Fund Management, you can compare the effects of market volatilities on British American and Jupiter Fund 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 British American with a short position of Jupiter Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of British American and Jupiter Fund.
Diversification Opportunities for British American and Jupiter Fund
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between British and Jupiter is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding British American Tobacco and Jupiter Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Fund Management and British American 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 British American Tobacco are associated (or correlated) with Jupiter Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Fund Management has no effect on the direction of British American i.e., British American and Jupiter Fund go up and down completely randomly.
Pair Corralation between British American and Jupiter Fund
Assuming the 90 days trading horizon British American Tobacco is expected to generate 0.57 times more return on investment than Jupiter Fund. However, British American Tobacco is 1.76 times less risky than Jupiter Fund. It trades about 0.11 of its potential returns per unit of risk. Jupiter Fund Management is currently generating about 0.03 per unit of risk. If you would invest 2,619 in British American Tobacco on September 4, 2024 and sell it today you would earn a total of 1,097 from holding British American Tobacco or generate 41.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
British American Tobacco vs. Jupiter Fund Management
Performance |
| Timeline |
| British American Tobacco |
| Jupiter Fund Management |
British American and Jupiter Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British American and Jupiter Fund
The main advantage of trading using opposite British American and Jupiter Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British American position performs unexpectedly, Jupiter Fund 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 Jupiter Fund will offset losses from the drop in Jupiter Fund's long position.| British American vs. Samsung Electronics Co | British American vs. Samsung Electronics Co | British American vs. Hyundai Motor | British American vs. Toyota Motor Corp |
| Jupiter Fund vs. X FAB Silicon Foundries | Jupiter Fund vs. Cars Inc | Jupiter Fund vs. Allianz Technology Trust | Jupiter Fund vs. Primary Health Properties |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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