Correlation Between Madison Square and Jupiter Marine

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

By analyzing existing cross correlation between Madison Square Garden and Jupiter Marine International, you can compare the effects of market volatilities on Madison Square and Jupiter Marine 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 Madison Square with a short position of Jupiter Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Madison Square and Jupiter Marine.

Diversification Opportunities for Madison Square and Jupiter Marine

0.0

Correlation Coefficient

Madison Square  Jupiter Marine

Pay attention - limited upside

The 3 months correlation between Madison and Jupiter is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Madison Square Garden and Jupiter Marine International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Marine Inter and Madison Square 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 Madison Square Garden are associated (or correlated) with Jupiter Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Marine Inter has no effect on the direction of Madison Square i.e., Madison Square and Jupiter Marine go up and down completely randomly.

Pair Corralation between Madison Square and Jupiter Marine

Given the investment horizon of 90 days Madison Square is expected to generate 610.38 times less return on investment than Jupiter Marine. But when comparing it to its historical volatility, Madison Square Garden is 21.04 times less risky than Jupiter Marine. It trades about 0.0 of its potential returns per unit of risk. Jupiter Marine International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Jupiter Marine International on October 3, 2024 and sell it today you would earn a total of  0.00  from holding Jupiter Marine International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	79.8%
Values	Daily Returns

Madison Square Garden  vs.  Jupiter Marine International

Madison Square Garden

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Madison Square Garden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Jupiter Marine Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jupiter Marine International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Jupiter Marine is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Madison Square and Jupiter Marine

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

The idea behind Madison Square Garden and Jupiter Marine International 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.