Correlation Between Jupiter and SNC

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

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

Diversification Opportunities for Jupiter and SNC

-0.33

Correlation Coefficient

Jupiter  SNC

Very good diversification

The 3 months correlation between Jupiter and SNC is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter and SNC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNC 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 SNC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNC has no effect on the direction of Jupiter i.e., Jupiter and SNC go up and down completely randomly.

Pair Corralation between Jupiter and SNC

Assuming the 90 days trading horizon Jupiter is expected to generate 1.17 times more return on investment than SNC. However, Jupiter is 1.17 times more volatile than SNC. It trades about 0.17 of its potential returns per unit of risk. SNC is currently generating about -0.04 per unit of risk. If you would invest  70.00  in Jupiter on September 1, 2024 and sell it today you would earn a total of  46.00  from holding Jupiter or generate 65.71% return on investment over 90 days.

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

Jupiter  vs.  SNC

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.

SNC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Jupiter and SNC

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

The idea behind Jupiter and SNC 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.