Correlation Between Jupiter Fund and Canadian Utilities

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

Diversification Opportunities for Jupiter Fund and Canadian Utilities

0.31

Correlation Coefficient

Jupiter Fund  Canadian Utilities

Weak diversification

The 3 months correlation between Jupiter and Canadian is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Fund Management and Canadian Utilities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities 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 Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of Jupiter Fund i.e., Jupiter Fund and Canadian Utilities go up and down completely randomly.

Pair Corralation between Jupiter Fund and Canadian Utilities

Assuming the 90 days horizon Jupiter Fund Management is expected to generate 1.41 times more return on investment than Canadian Utilities. However, Jupiter Fund is 1.41 times more volatile than Canadian Utilities Limited. It trades about 0.14 of its potential returns per unit of risk. Canadian Utilities Limited is currently generating about 0.07 per unit of risk. If you would invest  93.00  in Jupiter Fund Management on October 6, 2024 and sell it today you would earn a total of  9.00  from holding Jupiter Fund Management or generate 9.68% return on investment over 90 days.

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

Jupiter Fund Management  vs.  Canadian Utilities Limited

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 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.

Canadian Utilities

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Jupiter Fund and Canadian Utilities

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

The idea behind Jupiter Fund Management and Canadian Utilities Limited 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.