Correlation Between Jupiter Green and Capital Metals

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

Diversification Opportunities for Jupiter Green and Capital Metals

-0.4

Correlation Coefficient

Jupiter Green  Capital Metals

Very good diversification

The 3 months correlation between Jupiter and Capital is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Green Investment and Capital Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Metals PLC 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 Capital Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Metals PLC has no effect on the direction of Jupiter Green i.e., Jupiter Green and Capital Metals go up and down completely randomly.

Pair Corralation between Jupiter Green and Capital Metals

Assuming the 90 days trading horizon Jupiter Green is expected to generate 6.43 times less return on investment than Capital Metals. But when comparing it to its historical volatility, Jupiter Green Investment is 5.41 times less risky than Capital Metals. It trades about 0.03 of its potential returns per unit of risk. Capital Metals PLC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  265.00  in Capital Metals PLC on October 11, 2024 and sell it today you would lose (95.00) from holding Capital Metals PLC or give up 35.85% of portfolio value over 90 days.

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

Jupiter Green Investment  vs.  Capital Metals PLC

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.

Capital Metals PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital Metals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Capital Metals 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 Capital Metals

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

The idea behind Jupiter Green Investment and Capital Metals PLC 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .