Correlation Between Jupiter and VIDY

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

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

Diversification Opportunities for Jupiter and VIDY

0.48

Correlation Coefficient

Jupiter  VIDY

Very weak diversification

The 3 months correlation between Jupiter and VIDY is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter and VIDY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIDY 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 VIDY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIDY has no effect on the direction of Jupiter i.e., Jupiter and VIDY go up and down completely randomly.

Pair Corralation between Jupiter and VIDY

Assuming the 90 days trading horizon Jupiter is expected to under-perform the VIDY. But the crypto coin apears to be less risky and, when comparing its historical volatility, Jupiter is 1.47 times less risky than VIDY. The crypto coin trades about -0.04 of its potential returns per unit of risk. The VIDY is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  0.00  in VIDY on November 28, 2024 and sell it today you would lose  0.00  from holding VIDY or give up 28.57% of portfolio value over 90 days.

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

Jupiter  vs.  VIDY

Jupiter

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jupiter has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for Jupiter shareholders.

VIDY

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VIDY are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, VIDY exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jupiter and VIDY

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

The idea behind Jupiter and VIDY 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.