Correlation Between New Perspective and Jupiter Energy
Can any of the company-specific risk be diversified away by investing in both New Perspective and Jupiter Energy 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 New Perspective and Jupiter Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Perspective Fund and Jupiter Energy Limited, you can compare the effects of market volatilities on New Perspective and Jupiter Energy 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 New Perspective with a short position of Jupiter Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Jupiter Energy.
Diversification Opportunities for New Perspective and Jupiter Energy
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Jupiter is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund and Jupiter Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Energy and New Perspective 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 New Perspective Fund are associated (or correlated) with Jupiter Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Energy has no effect on the direction of New Perspective i.e., New Perspective and Jupiter Energy go up and down completely randomly.
Pair Corralation between New Perspective and Jupiter Energy
Assuming the 90 days horizon New Perspective is expected to generate 35.04 times less return on investment than Jupiter Energy. But when comparing it to its historical volatility, New Perspective Fund is 37.29 times less risky than Jupiter Energy. It trades about 0.14 of its potential returns per unit of risk. Jupiter Energy Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1.10 in Jupiter Energy Limited on October 24, 2024 and sell it today you would earn a total of 0.10 from holding Jupiter Energy Limited or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
New Perspective Fund vs. Jupiter Energy Limited
Performance |
| Timeline |
| New Perspective |
| Jupiter Energy |
New Perspective and Jupiter Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and Jupiter Energy
The main advantage of trading using opposite New Perspective and Jupiter Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective position performs unexpectedly, Jupiter Energy 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 Energy will offset losses from the drop in Jupiter Energy's long position.| New Perspective vs. Growth Fund Of | New Perspective vs. American Funds Fundamental | New Perspective vs. Investment Of America | New Perspective vs. Smallcap World Fund |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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