Correlation Between Jupiter Fund and Fair Oaks
Can any of the company-specific risk be diversified away by investing in both Jupiter Fund and Fair Oaks 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 Fair Oaks 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 Fair Oaks Income, you can compare the effects of market volatilities on Jupiter Fund and Fair Oaks 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 Fair Oaks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jupiter Fund and Fair Oaks.
Diversification Opportunities for Jupiter Fund and Fair Oaks
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jupiter and Fair is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Fund Management and Fair Oaks Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Oaks Income 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 Fair Oaks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Oaks Income has no effect on the direction of Jupiter Fund i.e., Jupiter Fund and Fair Oaks go up and down completely randomly.
Pair Corralation between Jupiter Fund and Fair Oaks
Assuming the 90 days trading horizon Jupiter Fund Management is expected to under-perform the Fair Oaks. In addition to that, Jupiter Fund is 1.59 times more volatile than Fair Oaks Income. It trades about -0.09 of its total potential returns per unit of risk. Fair Oaks Income is currently generating about 0.12 per unit of volatility. If you would invest 55.00 in Fair Oaks Income on December 8, 2024 and sell it today you would earn a total of 2.00 from holding Fair Oaks Income or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jupiter Fund Management vs. Fair Oaks Income
Performance |
| Timeline |
| Jupiter Fund Management |
| Fair Oaks Income |
Jupiter Fund and Fair Oaks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jupiter Fund and Fair Oaks
The main advantage of trading using opposite Jupiter Fund and Fair Oaks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jupiter Fund position performs unexpectedly, Fair Oaks 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 Fair Oaks will offset losses from the drop in Fair Oaks' long position.| Jupiter Fund vs. EJF Investments | ||
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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