Correlation Between Lindsell Train and Jupiter Fund

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

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

Diversification Opportunities for Lindsell Train and Jupiter Fund

-0.37

Correlation Coefficient

Lindsell Train  Jupiter Fund

Very good diversification

The 3 months correlation between Lindsell and Jupiter is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment and Jupiter Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Fund Management and Lindsell Train 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 Lindsell Train Investment are associated (or correlated) with Jupiter Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Fund Management has no effect on the direction of Lindsell Train i.e., Lindsell Train and Jupiter Fund go up and down completely randomly.

Pair Corralation between Lindsell Train and Jupiter Fund

Assuming the 90 days trading horizon Lindsell Train Investment is expected to generate 0.56 times more return on investment than Jupiter Fund. However, Lindsell Train Investment is 1.77 times less risky than Jupiter Fund. It trades about 0.08 of its potential returns per unit of risk. Jupiter Fund Management is currently generating about -0.09 per unit of risk. If you would invest  77,600  in Lindsell Train Investment on December 24, 2024 and sell it today you would earn a total of  5,000  from holding Lindsell Train Investment or generate 6.44% return on investment over 90 days.

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

Lindsell Train Investment  vs.  Jupiter Fund Management

Lindsell Train Investment

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lindsell Train Investment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Lindsell Train may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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.

Pair Trading with Lindsell Train and Jupiter Fund

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

The idea behind Lindsell Train Investment and Jupiter Fund Management 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.