Correlation Between Jupiter and OLT

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

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

Diversification Opportunities for Jupiter and OLT

-0.49

Correlation Coefficient

Jupiter  OLT

Very good diversification

The 3 months correlation between Jupiter and OLT is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter and OLT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OLT and Jupiter 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 are associated (or correlated) with OLT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OLT has no effect on the direction of Jupiter i.e., Jupiter and OLT go up and down completely randomly.

Pair Corralation between Jupiter and OLT

Assuming the 90 days trading horizon Jupiter is expected to generate 2.07 times less return on investment than OLT. But when comparing it to its historical volatility, Jupiter is 2.3 times less risky than OLT. It trades about 0.17 of its potential returns per unit of risk. OLT is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  0.05  in OLT on September 1, 2024 and sell it today you would earn a total of  0.01  from holding OLT or generate 29.94% return on investment over 90 days.

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

Jupiter  vs.  OLT

Jupiter

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jupiter are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Jupiter exhibited solid returns over the last few months and may actually be approaching a breakup point.

OLT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OLT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for OLT shareholders.

Pair Trading with Jupiter and OLT

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

The idea behind Jupiter and OLT 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.