Correlation Between Jupiter Fund and Unite Group

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

Diversification Opportunities for Jupiter Fund and Unite Group

0.15

Correlation Coefficient

Jupiter Fund  Unite Group

Average diversification

The 3 months correlation between Jupiter and Unite is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Fund Management and Unite Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unite Group PLC 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 Unite Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unite Group PLC has no effect on the direction of Jupiter Fund i.e., Jupiter Fund and Unite Group go up and down completely randomly.

Pair Corralation between Jupiter Fund and Unite Group

Assuming the 90 days trading horizon Jupiter Fund Management is expected to generate 1.79 times more return on investment than Unite Group. However, Jupiter Fund is 1.79 times more volatile than Unite Group PLC. It trades about 0.01 of its potential returns per unit of risk. Unite Group PLC is currently generating about -0.24 per unit of risk. If you would invest  8,580  in Jupiter Fund Management on October 10, 2024 and sell it today you would earn a total of  20.00  from holding Jupiter Fund Management or generate 0.23% return on investment over 90 days.

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

Jupiter Fund Management  vs.  Unite Group PLC

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.

Unite Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unite Group PLC 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 Unite Group

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

The idea behind Jupiter Fund Management and Unite Group PLC 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.