Correlation Between Future Metals and Jupiter Green

Can any of the company-specific risk be diversified away by investing in both Future Metals and Jupiter Green 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 Future Metals and Jupiter Green into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Future Metals NL and Jupiter Green Investment, you can compare the effects of market volatilities on Future Metals and Jupiter Green 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 Future Metals with a short position of Jupiter Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Future Metals and Jupiter Green.

Diversification Opportunities for Future Metals and Jupiter Green

-0.23

Correlation Coefficient

Future Metals  Jupiter Green

Very good diversification

The 3 months correlation between Future and Jupiter is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Future Metals NL and Jupiter Green Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Green Investment and Future Metals 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 Future Metals NL are associated (or correlated) with Jupiter Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Green Investment has no effect on the direction of Future Metals i.e., Future Metals and Jupiter Green go up and down completely randomly.

Pair Corralation between Future Metals and Jupiter Green

Assuming the 90 days trading horizon Future Metals NL is expected to under-perform the Jupiter Green. In addition to that, Future Metals is 2.55 times more volatile than Jupiter Green Investment. It trades about -0.07 of its total potential returns per unit of risk. Jupiter Green Investment is currently generating about 0.03 per unit of volatility. If you would invest  20,500  in Jupiter Green Investment on October 11, 2024 and sell it today you would earn a total of  3,300  from holding Jupiter Green Investment or generate 16.1% return on investment over 90 days.

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

Future Metals NL  vs.  Jupiter Green Investment

Future Metals NL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Future Metals NL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Jupiter Green Investment

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jupiter Green Investment are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Jupiter Green may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Future Metals and Jupiter Green

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

The idea behind Future Metals NL and Jupiter Green Investment 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..