Correlation Between Jupiter Fund and CrowdStrike Holdings

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

Diversification Opportunities for Jupiter Fund and CrowdStrike Holdings

0.08

Correlation Coefficient

Jupiter Fund  CrowdStrike Holdings

Significant diversification

The 3 months correlation between Jupiter and CrowdStrike is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Fund Management and CrowdStrike Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrowdStrike Holdings 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 CrowdStrike Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrowdStrike Holdings has no effect on the direction of Jupiter Fund i.e., Jupiter Fund and CrowdStrike Holdings go up and down completely randomly.

Pair Corralation between Jupiter Fund and CrowdStrike Holdings

Assuming the 90 days horizon Jupiter Fund Management is expected to under-perform the CrowdStrike Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Jupiter Fund Management is 1.08 times less risky than CrowdStrike Holdings. The stock trades about -0.02 of its potential returns per unit of risk. The CrowdStrike Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  10,090  in CrowdStrike Holdings on October 23, 2024 and sell it today you would earn a total of  24,410  from holding CrowdStrike Holdings or generate 241.92% return on investment over 90 days.

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

Jupiter Fund Management  vs.  CrowdStrike Holdings

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 uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

CrowdStrike Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CrowdStrike Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CrowdStrike Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jupiter Fund and CrowdStrike Holdings

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

The idea behind Jupiter Fund Management and CrowdStrike Holdings 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.