Correlation Between Jupiter Green and Volkswagen

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

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

Diversification Opportunities for Jupiter Green and Volkswagen

-0.06

Correlation Coefficient

Jupiter Green  Volkswagen

Good diversification

The 3 months correlation between Jupiter and Volkswagen is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Green Investment and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG and Jupiter Green 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 Green Investment are associated (or correlated) with Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of Jupiter Green i.e., Jupiter Green and Volkswagen go up and down completely randomly.

Pair Corralation between Jupiter Green and Volkswagen

Assuming the 90 days trading horizon Jupiter Green Investment is expected to generate 1.17 times more return on investment than Volkswagen. However, Jupiter Green is 1.17 times more volatile than Volkswagen AG. It trades about 0.03 of its potential returns per unit of risk. Volkswagen AG is currently generating about -0.05 per unit of risk. If you would invest  20,500  in Jupiter Green Investment on October 10, 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

Jupiter Green Investment  vs.  Volkswagen AG

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.

Volkswagen AG

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Jupiter Green and Volkswagen

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

The idea behind Jupiter Green Investment and Volkswagen 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.