Correlation Between TRAINLINE PLC and Jupiter Fund

Can any of the company-specific risk be diversified away by investing in both TRAINLINE PLC 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 TRAINLINE PLC and Jupiter Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TRAINLINE PLC LS and Jupiter Fund Management, you can compare the effects of market volatilities on TRAINLINE PLC 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 TRAINLINE PLC with a short position of Jupiter Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and Jupiter Fund.

Diversification Opportunities for TRAINLINE PLC and Jupiter Fund

-0.27

Correlation Coefficient

TRAINLINE PLC  Jupiter Fund

Very good diversification

The 3 months correlation between TRAINLINE and Jupiter is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS 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 TRAINLINE PLC 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 TRAINLINE PLC LS 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 TRAINLINE PLC i.e., TRAINLINE PLC and Jupiter Fund go up and down completely randomly.

Pair Corralation between TRAINLINE PLC and Jupiter Fund

Assuming the 90 days trading horizon TRAINLINE PLC is expected to generate 1.99 times less return on investment than Jupiter Fund. In addition to that, TRAINLINE PLC is 1.52 times more volatile than Jupiter Fund Management. It trades about 0.05 of its total potential returns per unit of risk. Jupiter Fund Management is currently generating about 0.16 per unit of volatility. If you would invest  92.00  in Jupiter Fund Management on October 7, 2024 and sell it today you would earn a total of  10.00  from holding Jupiter Fund Management or generate 10.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

TRAINLINE PLC LS  vs.  Jupiter Fund Management

TRAINLINE PLC LS

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TRAINLINE PLC LS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, TRAINLINE PLC reported solid returns over the last few months and may actually be approaching a breakup point.

Jupiter Fund Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jupiter Fund Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Jupiter Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TRAINLINE PLC and Jupiter Fund

The main advantage of trading using opposite TRAINLINE PLC and Jupiter Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAINLINE PLC 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 TRAINLINE PLC LS 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.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.