Correlation Between Shin-Etsu Chemical and Jupiter Fund
Can any of the company-specific risk be diversified away by investing in both Shin-Etsu Chemical 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 Shin-Etsu Chemical and Jupiter Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shin Etsu Chemical Co and Jupiter Fund Management, you can compare the effects of market volatilities on Shin-Etsu Chemical 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 Shin-Etsu Chemical with a short position of Jupiter Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shin-Etsu Chemical and Jupiter Fund.
Diversification Opportunities for Shin-Etsu Chemical and Jupiter Fund
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shin-Etsu and Jupiter is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shin Etsu Chemical Co 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 Shin-Etsu Chemical 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 Shin Etsu Chemical Co 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 Shin-Etsu Chemical i.e., Shin-Etsu Chemical and Jupiter Fund go up and down completely randomly.
Pair Corralation between Shin-Etsu Chemical and Jupiter Fund
Assuming the 90 days horizon Shin-Etsu Chemical is expected to generate 3.54 times less return on investment than Jupiter Fund. But when comparing it to its historical volatility, Shin Etsu Chemical Co is 1.23 times less risky than Jupiter Fund. It trades about 0.01 of its potential returns per unit of risk. Jupiter Fund Management is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 94.00 in Jupiter Fund Management on September 2, 2024 and sell it today you would earn a total of 6.00 from holding Jupiter Fund Management or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shin Etsu Chemical Co vs. Jupiter Fund Management
Performance |
| Timeline |
| Shin Etsu Chemical |
| Jupiter Fund Management |
Shin-Etsu Chemical and Jupiter Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shin-Etsu Chemical and Jupiter Fund
The main advantage of trading using opposite Shin-Etsu Chemical and Jupiter Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin-Etsu Chemical 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.The idea behind Shin Etsu Chemical Co and Jupiter Fund Management 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.| Jupiter Fund vs. Ameriprise Financial | Jupiter Fund vs. Ares Management Corp | Jupiter Fund vs. Superior Plus Corp | Jupiter Fund vs. NMI Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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