Correlation Between Jupiter Fund and INTER CARS
Can any of the company-specific risk be diversified away by investing in both Jupiter Fund and INTER CARS 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 INTER CARS 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 INTER CARS SA, you can compare the effects of market volatilities on Jupiter Fund and INTER CARS 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 INTER CARS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jupiter Fund and INTER CARS.
Diversification Opportunities for Jupiter Fund and INTER CARS
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jupiter and INTER is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Fund Management and INTER CARS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTER CARS SA 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 INTER CARS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTER CARS SA has no effect on the direction of Jupiter Fund i.e., Jupiter Fund and INTER CARS go up and down completely randomly.
Pair Corralation between Jupiter Fund and INTER CARS
Assuming the 90 days horizon Jupiter Fund Management is expected to under-perform the INTER CARS. In addition to that, Jupiter Fund is 1.18 times more volatile than INTER CARS SA. It trades about -0.02 of its total potential returns per unit of risk. INTER CARS SA is currently generating about 0.03 per unit of volatility. If you would invest 9,228 in INTER CARS SA on October 5, 2024 and sell it today you would earn a total of 2,752 from holding INTER CARS SA or generate 29.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Jupiter Fund Management vs. INTER CARS SA
Performance |
Timeline |
Jupiter Fund Management |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
INTER CARS SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Jupiter Fund and INTER CARS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jupiter Fund and INTER CARS
The main advantage of trading using opposite Jupiter Fund and INTER CARS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jupiter Fund position performs unexpectedly, INTER CARS 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 INTER CARS will offset losses from the drop in INTER CARS's long position.The idea behind Jupiter Fund Management and INTER CARS SA 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.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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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