Correlation Between Jupiter Fund and Aberdeen Diversified

Can any of the company-specific risk be diversified away by investing in both Jupiter Fund and Aberdeen Diversified 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 Aberdeen Diversified 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 Aberdeen Diversified Income, you can compare the effects of market volatilities on Jupiter Fund and Aberdeen Diversified 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 Aberdeen Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jupiter Fund and Aberdeen Diversified.

Diversification Opportunities for Jupiter Fund and Aberdeen Diversified

0.28

Correlation Coefficient

Jupiter Fund  Aberdeen Diversified

Modest diversification

The 3 months correlation between Jupiter and Aberdeen is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Fund Management and Aberdeen Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Diversified 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 Aberdeen Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Diversified has no effect on the direction of Jupiter Fund i.e., Jupiter Fund and Aberdeen Diversified go up and down completely randomly.

Pair Corralation between Jupiter Fund and Aberdeen Diversified

Assuming the 90 days trading horizon Jupiter Fund Management is expected to generate 0.76 times more return on investment than Aberdeen Diversified. However, Jupiter Fund Management is 1.32 times less risky than Aberdeen Diversified. It trades about 0.12 of its potential returns per unit of risk. Aberdeen Diversified Income is currently generating about 0.01 per unit of risk. If you would invest  8,100  in Jupiter Fund Management on September 19, 2024 and sell it today you would earn a total of  200.00  from holding Jupiter Fund Management or generate 2.47% return on investment over 90 days.

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

Jupiter Fund Management  vs.  Aberdeen Diversified Income

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Aberdeen Diversified

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aberdeen Diversified Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Aberdeen Diversified is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Jupiter Fund and Aberdeen Diversified

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

The idea behind Jupiter Fund Management and Aberdeen Diversified Income 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 Transaction History module to view history of all your transactions and understand their impact on performance.