Correlation Between Jupiter Fund and Universal Display

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

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

Diversification Opportunities for Jupiter Fund and Universal Display

0.59

Correlation Coefficient

Jupiter Fund  Universal Display

Very weak diversification

The 3 months correlation between Jupiter and Universal is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Fund Management and Universal Display Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display Corp and Jupiter Fund 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 Fund Management are associated (or correlated) with Universal Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Display Corp has no effect on the direction of Jupiter Fund i.e., Jupiter Fund and Universal Display go up and down completely randomly.

Pair Corralation between Jupiter Fund and Universal Display

Assuming the 90 days trading horizon Jupiter Fund Management is expected to generate 0.5 times more return on investment than Universal Display. However, Jupiter Fund Management is 1.99 times less risky than Universal Display. It trades about 0.0 of its potential returns per unit of risk. Universal Display Corp is currently generating about -0.04 per unit of risk. If you would invest  8,400  in Jupiter Fund Management on September 3, 2024 and sell it today you would lose (50.00) from holding Jupiter Fund Management or give up 0.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Jupiter Fund Management  vs.  Universal Display Corp

Jupiter Fund Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jupiter Fund Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Jupiter Fund is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Universal Display Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Universal Display Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Jupiter Fund and Universal Display

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

The idea behind Jupiter Fund Management and Universal Display Corp 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 Stocks Directory module to find actively traded stocks across global markets.