Correlation Between Mercantile Investment and Jupiter Fund
Can any of the company-specific risk be diversified away by investing in both Mercantile Investment and Jupiter Fund 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 Mercantile Investment and Jupiter Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Mercantile Investment and Jupiter Fund Management, you can compare the effects of market volatilities on Mercantile Investment and Jupiter Fund 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 Mercantile Investment with a short position of Jupiter Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercantile Investment and Jupiter Fund.
Diversification Opportunities for Mercantile Investment and Jupiter Fund
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mercantile and Jupiter is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding The Mercantile Investment and Jupiter Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Fund Management and Mercantile Investment 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 The Mercantile Investment are associated (or correlated) with Jupiter Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Fund Management has no effect on the direction of Mercantile Investment i.e., Mercantile Investment and Jupiter Fund go up and down completely randomly.
Pair Corralation between Mercantile Investment and Jupiter Fund
Assuming the 90 days trading horizon The Mercantile Investment is expected to under-perform the Jupiter Fund. But the stock apears to be less risky and, when comparing its historical volatility, The Mercantile Investment is 1.42 times less risky than Jupiter Fund. The stock trades about -0.08 of its potential returns per unit of risk. The Jupiter Fund Management is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 8,580 in Jupiter Fund Management on August 29, 2024 and sell it today you would lose (250.00) from holding Jupiter Fund Management or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Mercantile Investment vs. Jupiter Fund Management
Performance |
| Timeline |
| The Mercantile Investment |
| Jupiter Fund Management |
Mercantile Investment and Jupiter Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercantile Investment and Jupiter Fund
The main advantage of trading using opposite Mercantile Investment and Jupiter Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercantile Investment position performs unexpectedly, Jupiter Fund 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 Jupiter Fund will offset losses from the drop in Jupiter Fund's long position.| Mercantile Investment vs. LPKF Laser Electronics | Mercantile Investment vs. Gaming Realms plc | Mercantile Investment vs. Compal Electronics GDR | Mercantile Investment vs. Flow Traders NV |
| Jupiter Fund vs. Toyota Motor Corp | Jupiter Fund vs. Lendinvest PLC | Jupiter Fund vs. Neometals | Jupiter Fund vs. Coor Service Management |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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