Correlation Between Jupiter Fund and Ceiba Investments

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Can any of the company-specific risk be diversified away by investing in both Jupiter Fund and Ceiba Investments 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 Ceiba Investments 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 Ceiba Investments, you can compare the effects of market volatilities on Jupiter Fund and Ceiba Investments 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 Ceiba Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jupiter Fund and Ceiba Investments.

Diversification Opportunities for Jupiter Fund and Ceiba Investments

0.2
  Correlation Coefficient

Modest diversification

The 3 months correlation between Jupiter and Ceiba is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Fund Management and Ceiba Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceiba Investments 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 Ceiba Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceiba Investments has no effect on the direction of Jupiter Fund i.e., Jupiter Fund and Ceiba Investments go up and down completely randomly.

Pair Corralation between Jupiter Fund and Ceiba Investments

Assuming the 90 days trading horizon Jupiter Fund is expected to generate 6.17 times less return on investment than Ceiba Investments. But when comparing it to its historical volatility, Jupiter Fund Management is 5.67 times less risky than Ceiba Investments. It trades about 0.03 of its potential returns per unit of risk. Ceiba Investments is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,250  in Ceiba Investments on September 1, 2024 and sell it today you would lose (800.00) from holding Ceiba Investments or give up 24.62% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Jupiter Fund Management  vs.  Ceiba Investments

 Performance 
       Timeline  
Jupiter Fund Management 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Jupiter Fund Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Jupiter Fund is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Ceiba Investments 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ceiba Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Jupiter Fund and Ceiba Investments Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jupiter Fund and Ceiba Investments

The main advantage of trading using opposite Jupiter Fund and Ceiba Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jupiter Fund position performs unexpectedly, Ceiba Investments 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 Ceiba Investments will offset losses from the drop in Ceiba Investments' long position.
The idea behind Jupiter Fund Management and Ceiba Investments 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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