Correlation Between Jupiter and JNT
Can any of the company-specific risk be diversified away by investing in both Jupiter and JNT 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 Jupiter and JNT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jupiter and JNT, you can compare the effects of market volatilities on Jupiter and JNT 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 Jupiter with a short position of JNT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jupiter and JNT.
Diversification Opportunities for Jupiter and JNT
Poor diversification
The 3 months correlation between Jupiter and JNT is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter and JNT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JNT and Jupiter 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 Jupiter are associated (or correlated) with JNT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JNT has no effect on the direction of Jupiter i.e., Jupiter and JNT go up and down completely randomly.
Pair Corralation between Jupiter and JNT
Assuming the 90 days trading horizon Jupiter is expected to generate 15.26 times more return on investment than JNT. However, Jupiter is 15.26 times more volatile than JNT. It trades about 0.05 of its potential returns per unit of risk. JNT is currently generating about 0.13 per unit of risk. If you would invest 0.42 in Jupiter on August 26, 2024 and sell it today you would earn a total of 112.58 from holding Jupiter or generate 26613.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 32.23% |
| Values | Daily Returns |
Jupiter vs. JNT
Performance |
| Timeline |
| Jupiter |
| JNT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jupiter and JNT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jupiter and JNT
The main advantage of trading using opposite Jupiter and JNT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jupiter position performs unexpectedly, JNT 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 JNT will offset losses from the drop in JNT's long position.The idea behind Jupiter and JNT 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.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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