Correlation Between Jupiter Fund and Electrica
Can any of the company-specific risk be diversified away by investing in both Jupiter Fund and Electrica 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 Electrica 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 Electrica SA, you can compare the effects of market volatilities on Jupiter Fund and Electrica 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 Electrica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jupiter Fund and Electrica.
Diversification Opportunities for Jupiter Fund and Electrica
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jupiter and Electrica is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Fund Management and Electrica SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrica SA 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 Electrica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrica SA has no effect on the direction of Jupiter Fund i.e., Jupiter Fund and Electrica go up and down completely randomly.
Pair Corralation between Jupiter Fund and Electrica
Assuming the 90 days trading horizon Jupiter Fund Management is expected to generate 1.53 times more return on investment than Electrica. However, Jupiter Fund is 1.53 times more volatile than Electrica SA. It trades about 0.06 of its potential returns per unit of risk. Electrica SA is currently generating about 0.07 per unit of risk. If you would invest 7,513 in Jupiter Fund Management on September 5, 2024 and sell it today you would earn a total of 977.00 from holding Jupiter Fund Management or generate 13.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Jupiter Fund Management vs. Electrica SA
Performance |
| Timeline |
| Jupiter Fund Management |
| Electrica SA |
Jupiter Fund and Electrica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jupiter Fund and Electrica
The main advantage of trading using opposite Jupiter Fund and Electrica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jupiter Fund position performs unexpectedly, Electrica 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 Electrica will offset losses from the drop in Electrica's long position.| Jupiter Fund vs. SupplyMe Capital PLC | Jupiter Fund vs. Lloyds Banking Group | Jupiter Fund vs. Premier African Minerals | Jupiter Fund vs. SANTANDER UK 8 |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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