Correlation Between North American and Jupiter Fund
Can any of the company-specific risk be diversified away by investing in both North American 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 North American and Jupiter Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North American Construction and Jupiter Fund Management, you can compare the effects of market volatilities on North American 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 North American with a short position of Jupiter Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and Jupiter Fund.
Diversification Opportunities for North American and Jupiter Fund
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between North and Jupiter is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding North American Construction 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 North American 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 North American Construction 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 North American i.e., North American and Jupiter Fund go up and down completely randomly.
Pair Corralation between North American and Jupiter Fund
Assuming the 90 days horizon North American is expected to generate 1.05 times less return on investment than Jupiter Fund. But when comparing it to its historical volatility, North American Construction is 1.02 times less risky than Jupiter Fund. It trades about 0.05 of its potential returns per unit of risk. Jupiter Fund Management is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 87.00 in Jupiter Fund Management on September 25, 2024 and sell it today you would earn a total of 13.00 from holding Jupiter Fund Management or generate 14.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
North American Construction vs. Jupiter Fund Management
Performance |
| Timeline |
| North American Const |
| Jupiter Fund Management |
North American and Jupiter Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North American and Jupiter Fund
The main advantage of trading using opposite North American and Jupiter Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North American 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.| North American vs. Avanos Medical | North American vs. Tsingtao Brewery | North American vs. ONWARD MEDICAL BV | North American vs. Zijin Mining Group |
| Jupiter Fund vs. Khiron Life Sciences | Jupiter Fund vs. LG Electronics | Jupiter Fund vs. IMPERIAL TOBACCO | Jupiter Fund vs. METHODE ELECTRONICS |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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