Correlation Between Pets At and Jupiter Fund

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

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

Diversification Opportunities for Pets At and Jupiter Fund

-0.54

Correlation Coefficient

Pets At  Jupiter Fund

Excellent diversification

The 3 months correlation between Pets and Jupiter is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Pets at Home 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 Pets At 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 Pets at Home 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 Pets At i.e., Pets At and Jupiter Fund go up and down completely randomly.

Pair Corralation between Pets At and Jupiter Fund

Assuming the 90 days trading horizon Pets at Home is expected to generate 0.81 times more return on investment than Jupiter Fund. However, Pets at Home is 1.24 times less risky than Jupiter Fund. It trades about 0.14 of its potential returns per unit of risk. Jupiter Fund Management is currently generating about -0.08 per unit of risk. If you would invest  20,740  in Pets at Home on December 23, 2024 and sell it today you would earn a total of  3,380  from holding Pets at Home or generate 16.3% return on investment over 90 days.

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

Pets at Home  vs.  Jupiter Fund Management

Pets at Home

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pets at Home are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Pets At unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 Pets At and Jupiter Fund

The main advantage of trading using opposite Pets At and Jupiter Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pets At 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 Pets at Home 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 Global Correlations module to find global opportunities by holding instruments from different markets.