Correlation Between Jupiter Fund and SM Energy
Can any of the company-specific risk be diversified away by investing in both Jupiter Fund and SM 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 Jupiter Fund and SM Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jupiter Fund Management and SM Energy Co, you can compare the effects of market volatilities on Jupiter Fund and SM 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 Jupiter Fund with a short position of SM Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jupiter Fund and SM Energy.
Diversification Opportunities for Jupiter Fund and SM Energy
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jupiter and 0KZA is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Fund Management and SM Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Energy and Jupiter Fund 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 Fund Management are associated (or correlated) with SM Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SM Energy has no effect on the direction of Jupiter Fund i.e., Jupiter Fund and SM Energy go up and down completely randomly.
Pair Corralation between Jupiter Fund and SM Energy
Assuming the 90 days trading horizon Jupiter Fund is expected to generate 1.96 times less return on investment than SM Energy. In addition to that, Jupiter Fund is 1.01 times more volatile than SM Energy Co. It trades about 0.03 of its total potential returns per unit of risk. SM Energy Co is currently generating about 0.05 per unit of volatility. If you would invest 3,496 in SM Energy Co on September 3, 2024 and sell it today you would earn a total of 888.00 from holding SM Energy Co or generate 25.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Jupiter Fund Management vs. SM Energy Co
Performance |
| Timeline |
| Jupiter Fund Management |
| SM Energy |
Jupiter Fund and SM Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jupiter Fund and SM Energy
The main advantage of trading using opposite Jupiter Fund and SM Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jupiter Fund position performs unexpectedly, SM 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 SM Energy will offset losses from the drop in SM Energy's long position.| Jupiter Fund vs. Ally Financial | Jupiter Fund vs. CleanTech Lithium plc | Jupiter Fund vs. Leroy Seafood Group | Jupiter Fund vs. British American Tobacco |
| SM Energy vs. Gaztransport et Technigaz | SM Energy vs. Schroders Investment Trusts | SM Energy vs. United States Steel | SM Energy vs. Zanaga Iron Ore |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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