Correlation Between Jupiter Energy and Kip McGrath

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

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

Diversification Opportunities for Jupiter Energy and Kip McGrath

0.51

Correlation Coefficient

Jupiter Energy  Kip McGrath

Very weak diversification

The 3 months correlation between Jupiter and Kip is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Energy and Kip McGrath Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kip McGrath Education and Jupiter Energy 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 Energy are associated (or correlated) with Kip McGrath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kip McGrath Education has no effect on the direction of Jupiter Energy i.e., Jupiter Energy and Kip McGrath go up and down completely randomly.

Pair Corralation between Jupiter Energy and Kip McGrath

Assuming the 90 days trading horizon Jupiter Energy is expected to generate 2.01 times more return on investment than Kip McGrath. However, Jupiter Energy is 2.01 times more volatile than Kip McGrath Education. It trades about 0.04 of its potential returns per unit of risk. Kip McGrath Education is currently generating about -0.01 per unit of risk. If you would invest  2.60  in Jupiter Energy on October 22, 2024 and sell it today you would earn a total of  0.40  from holding Jupiter Energy or generate 15.38% return on investment over 90 days.

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

Jupiter Energy  vs.  Kip McGrath Education

Jupiter Energy

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jupiter Energy are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Jupiter Energy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kip McGrath Education

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kip McGrath Education are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Kip McGrath unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jupiter Energy and Kip McGrath

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

The idea behind Jupiter Energy and Kip McGrath Education 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.