Correlation Between Jupiter Marine and Oriental Land

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

By analyzing existing cross correlation between Jupiter Marine International and Oriental Land Co, you can compare the effects of market volatilities on Jupiter Marine and Oriental Land 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 Marine with a short position of Oriental Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jupiter Marine and Oriental Land.

Diversification Opportunities for Jupiter Marine and Oriental Land

0.0

Correlation Coefficient

Jupiter Marine  Oriental Land

Pay attention - limited upside

The 3 months correlation between Jupiter and Oriental is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Marine International and Oriental Land Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Land and Jupiter Marine 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 Marine International are associated (or correlated) with Oriental Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Land has no effect on the direction of Jupiter Marine i.e., Jupiter Marine and Oriental Land go up and down completely randomly.

Pair Corralation between Jupiter Marine and Oriental Land

Given the investment horizon of 90 days Jupiter Marine is expected to generate 5.68 times less return on investment than Oriental Land. But when comparing it to its historical volatility, Jupiter Marine International is 2.27 times less risky than Oriental Land. It trades about 0.06 of its potential returns per unit of risk. Oriental Land Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  14,410  in Oriental Land Co on September 19, 2024 and sell it today you would lose (12,320) from holding Oriental Land Co or give up 85.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	88.13%
Values	Daily Returns

Jupiter Marine International  vs.  Oriental Land Co

Jupiter Marine Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jupiter Marine International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Jupiter Marine is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Oriental Land

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oriental Land Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Jupiter Marine and Oriental Land

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

The idea behind Jupiter Marine International and Oriental Land Co 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.