Correlation Between Jupiter Fund and Bank of Montreal

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

Diversification Opportunities for Jupiter Fund and Bank of Montreal

0.02

Correlation Coefficient

Jupiter Fund  Bank of Montreal

Significant diversification

The 3 months correlation between Jupiter and Bank is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Fund Management and Bank of Montreal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Montreal 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 Bank of Montreal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Montreal has no effect on the direction of Jupiter Fund i.e., Jupiter Fund and Bank of Montreal go up and down completely randomly.

Pair Corralation between Jupiter Fund and Bank of Montreal

Assuming the 90 days horizon Jupiter Fund is expected to generate 7.1 times less return on investment than Bank of Montreal. In addition to that, Jupiter Fund is 1.29 times more volatile than Bank of Montreal. It trades about 0.02 of its total potential returns per unit of risk. Bank of Montreal is currently generating about 0.16 per unit of volatility. If you would invest  8,186  in Bank of Montreal on October 4, 2024 and sell it today you would earn a total of  1,066  from holding Bank of Montreal or generate 13.02% 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.  Bank of Montreal

Jupiter Fund Management

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jupiter Fund Management are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Bank of Montreal

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Montreal are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Bank of Montreal reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jupiter Fund and Bank of Montreal

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

The idea behind Jupiter Fund Management and Bank of Montreal 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 Managers module to screen money managers from public funds and ETFs managed around the world.