Correlation Between Jupiter Fund and Heidelberg Materials

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

Diversification Opportunities for Jupiter Fund and Heidelberg Materials

0.07
  Correlation Coefficient

Significant diversification

The 3 months correlation between Jupiter and Heidelberg is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Fund Management and Heidelberg Materials AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heidelberg Materials 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 Heidelberg Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heidelberg Materials has no effect on the direction of Jupiter Fund i.e., Jupiter Fund and Heidelberg Materials go up and down completely randomly.

Pair Corralation between Jupiter Fund and Heidelberg Materials

Assuming the 90 days horizon Jupiter Fund Management is expected to under-perform the Heidelberg Materials. In addition to that, Jupiter Fund is 1.12 times more volatile than Heidelberg Materials AG. It trades about -0.07 of its total potential returns per unit of risk. Heidelberg Materials AG is currently generating about 0.26 per unit of volatility. If you would invest  9,742  in Heidelberg Materials AG on October 24, 2024 and sell it today you would earn a total of  3,503  from holding Heidelberg Materials AG or generate 35.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Jupiter Fund Management  vs.  Heidelberg Materials AG

 Performance 
       Timeline  
Jupiter Fund Management 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 weak 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.
Heidelberg Materials 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Heidelberg Materials AG are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, Heidelberg Materials exhibited solid returns over the last few months and may actually be approaching a breakup point.

Jupiter Fund and Heidelberg Materials Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jupiter Fund and Heidelberg Materials

The main advantage of trading using opposite Jupiter Fund and Heidelberg Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jupiter Fund position performs unexpectedly, Heidelberg Materials 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 Heidelberg Materials will offset losses from the drop in Heidelberg Materials' long position.
The idea behind Jupiter Fund Management and Heidelberg Materials AG 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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