Correlation Between BANK CIMB and Jupiter Fund

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

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

Diversification Opportunities for BANK CIMB and Jupiter Fund

0.21

Correlation Coefficient

BANK CIMB  Jupiter Fund

Modest diversification

The 3 months correlation between BANK and Jupiter is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding BANK CIMB NIAGA 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 BANK CIMB 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 BANK CIMB NIAGA 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 BANK CIMB i.e., BANK CIMB and Jupiter Fund go up and down completely randomly.

Pair Corralation between BANK CIMB and Jupiter Fund

Assuming the 90 days trading horizon BANK CIMB NIAGA is expected to generate 0.56 times more return on investment than Jupiter Fund. However, BANK CIMB NIAGA is 1.78 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 -0.05 per unit of risk. If you would invest  9.15  in BANK CIMB NIAGA on December 20, 2024 and sell it today you would lose (0.80) from holding BANK CIMB NIAGA or give up 8.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

BANK CIMB NIAGA  vs.  Jupiter Fund Management

BANK CIMB NIAGA

Risk-Adjusted Performance

Very Weak

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

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. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with BANK CIMB and Jupiter Fund

The main advantage of trading using opposite BANK CIMB and Jupiter Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK CIMB 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 BANK CIMB NIAGA 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.