Correlation Between Jupiter Fund and Ameriprise Financial

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

Diversification Opportunities for Jupiter Fund and Ameriprise Financial

-0.26

Correlation Coefficient

Jupiter Fund  Ameriprise Financial

Very good diversification

The 3 months correlation between Jupiter and Ameriprise is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Fund Management and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial 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 Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of Jupiter Fund i.e., Jupiter Fund and Ameriprise Financial go up and down completely randomly.

Pair Corralation between Jupiter Fund and Ameriprise Financial

Assuming the 90 days horizon Jupiter Fund Management is expected to under-perform the Ameriprise Financial. In addition to that, Jupiter Fund is 2.2 times more volatile than Ameriprise Financial. It trades about -0.04 of its total potential returns per unit of risk. Ameriprise Financial is currently generating about -0.04 per unit of volatility. If you would invest  53,554  in Ameriprise Financial on December 2, 2024 and sell it today you would lose (1,974) from holding Ameriprise Financial or give up 3.69% of portfolio value over 90 days.

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

Jupiter Fund Management  vs.  Ameriprise Financial

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 fragile 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.

Ameriprise Financial

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Jupiter Fund and Ameriprise Financial

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

The idea behind Jupiter Fund Management and Ameriprise Financial 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.