Correlation Between Jupiter Fund and Polar Capital

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

Diversification Opportunities for Jupiter Fund and Polar Capital

0.34

Correlation Coefficient

Jupiter Fund  Polar Capital

Weak diversification

The 3 months correlation between Jupiter and Polar is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Fund Management and Polar Capital Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Technology 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Technology has no effect on the direction of Jupiter Fund i.e., Jupiter Fund and Polar Capital go up and down completely randomly.

Pair Corralation between Jupiter Fund and Polar Capital

Assuming the 90 days trading horizon Jupiter Fund Management is expected to generate 1.22 times more return on investment than Polar Capital. However, Jupiter Fund is 1.22 times more volatile than Polar Capital Technology. It trades about -0.08 of its potential returns per unit of risk. Polar Capital Technology is currently generating about -0.1 per unit of risk. If you would invest  8,470  in Jupiter Fund Management on December 23, 2024 and sell it today you would lose (1,010) from holding Jupiter Fund Management or give up 11.92% of portfolio value over 90 days.

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

Jupiter Fund Management  vs.  Polar Capital Technology

Jupiter Fund Management

Risk-Adjusted Performance

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 latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Polar Capital Technology

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Jupiter Fund and Polar Capital

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

The idea behind Jupiter Fund Management and Polar Capital Technology 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.