Correlation Between Jupiter Fund and Ares Management

Can any of the company-specific risk be diversified away by investing in both Jupiter Fund and Ares Management 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 Ares Management 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 Ares Management Corp, you can compare the effects of market volatilities on Jupiter Fund and Ares Management 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 Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jupiter Fund and Ares Management.

Diversification Opportunities for Jupiter Fund and Ares Management

0.33

Correlation Coefficient

Jupiter Fund  Ares Management

Weak diversification

The 3 months correlation between Jupiter and Ares is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Fund Management and Ares Management Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Management Corp 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 Ares Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Management Corp has no effect on the direction of Jupiter Fund i.e., Jupiter Fund and Ares Management go up and down completely randomly.

Pair Corralation between Jupiter Fund and Ares Management

Assuming the 90 days horizon Jupiter Fund Management is expected to generate 1.18 times more return on investment than Ares Management. However, Jupiter Fund is 1.18 times more volatile than Ares Management Corp. It trades about -0.06 of its potential returns per unit of risk. Ares Management Corp is currently generating about -0.1 per unit of risk. If you would invest  102.00  in Jupiter Fund Management on December 29, 2024 and sell it today you would lose (13.00) from holding Jupiter Fund Management or give up 12.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Jupiter Fund Management  vs.  Ares Management Corp

Jupiter Fund Management

Risk-Adjusted Performance

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 latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Ares Management Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ares Management Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Jupiter Fund and Ares Management

The main advantage of trading using opposite Jupiter Fund and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jupiter Fund position performs unexpectedly, Ares Management 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 Ares Management will offset losses from the drop in Ares Management's long position.

The idea behind Jupiter Fund Management and Ares Management Corp 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.