Correlation Between DFS Furniture and Jupiter Green
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and Jupiter Green 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 DFS Furniture and Jupiter Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and Jupiter Green Investment, you can compare the effects of market volatilities on DFS Furniture and Jupiter Green 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 DFS Furniture with a short position of Jupiter Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Jupiter Green.
Diversification Opportunities for DFS Furniture and Jupiter Green
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DFS and Jupiter is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and Jupiter Green Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Green Investment and DFS Furniture 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 DFS Furniture PLC are associated (or correlated) with Jupiter Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Green Investment has no effect on the direction of DFS Furniture i.e., DFS Furniture and Jupiter Green go up and down completely randomly.
Pair Corralation between DFS Furniture and Jupiter Green
Assuming the 90 days trading horizon DFS Furniture is expected to generate 1.8 times less return on investment than Jupiter Green. In addition to that, DFS Furniture is 1.19 times more volatile than Jupiter Green Investment. It trades about 0.01 of its total potential returns per unit of risk. Jupiter Green Investment is currently generating about 0.02 per unit of volatility. If you would invest 20,600 in Jupiter Green Investment on September 3, 2024 and sell it today you would earn a total of 1,900 from holding Jupiter Green Investment or generate 9.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. Jupiter Green Investment
Performance |
| Timeline |
| DFS Furniture PLC |
| Jupiter Green Investment |
DFS Furniture and Jupiter Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Jupiter Green
The main advantage of trading using opposite DFS Furniture and Jupiter Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, Jupiter Green 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 Green will offset losses from the drop in Jupiter Green's long position.| DFS Furniture vs. Rockfire Resources plc | DFS Furniture vs. Tlou Energy | DFS Furniture vs. Falcon Oil Gas | DFS Furniture vs. Helium One Global |
| Jupiter Green vs. Catena Media PLC | Jupiter Green vs. Induction Healthcare Group | Jupiter Green vs. Everyman Media Group | Jupiter Green vs. Optima Health plc |
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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