Correlation Between Jupiter Acquisition and Welsbach Technology

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

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

Diversification Opportunities for Jupiter Acquisition and Welsbach Technology

0.89

Correlation Coefficient

Jupiter Acquisition  Welsbach Technology

Very poor diversification

The 3 months correlation between Jupiter and Welsbach is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Acquisition Corp and Welsbach Technology Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welsbach Technology and Jupiter Acquisition 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 Acquisition Corp are associated (or correlated) with Welsbach Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welsbach Technology has no effect on the direction of Jupiter Acquisition i.e., Jupiter Acquisition and Welsbach Technology go up and down completely randomly.

Pair Corralation between Jupiter Acquisition and Welsbach Technology

Assuming the 90 days horizon Jupiter Acquisition Corp is expected to generate 0.37 times more return on investment than Welsbach Technology. However, Jupiter Acquisition Corp is 2.68 times less risky than Welsbach Technology. It trades about 0.17 of its potential returns per unit of risk. Welsbach Technology Metals is currently generating about 0.05 per unit of risk. If you would invest  1,001  in Jupiter Acquisition Corp on October 5, 2024 and sell it today you would earn a total of  39.00  from holding Jupiter Acquisition Corp or generate 3.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	19.78%
Values	Daily Returns

Jupiter Acquisition Corp  vs.  Welsbach Technology Metals

Jupiter Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jupiter Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Jupiter Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Welsbach Technology

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Welsbach Technology Metals are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent primary indicators, Welsbach Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Jupiter Acquisition and Welsbach Technology

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

The idea behind Jupiter Acquisition Corp and Welsbach Technology Metals 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.