Correlation Between Star Combo and Jupiter Energy

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

By analyzing existing cross correlation between Star Combo Pharma and Jupiter Energy, you can compare the effects of market volatilities on Star Combo and Jupiter Energy 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 Star Combo with a short position of Jupiter Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Combo and Jupiter Energy.

Diversification Opportunities for Star Combo and Jupiter Energy

-0.41

Correlation Coefficient

Star Combo  Jupiter Energy

Very good diversification

The 3 months correlation between Star and Jupiter is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Star Combo Pharma and Jupiter Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Energy and Star Combo 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 Star Combo Pharma are associated (or correlated) with Jupiter Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Energy has no effect on the direction of Star Combo i.e., Star Combo and Jupiter Energy go up and down completely randomly.

Pair Corralation between Star Combo and Jupiter Energy

Assuming the 90 days trading horizon Star Combo is expected to generate 3.14 times less return on investment than Jupiter Energy. But when comparing it to its historical volatility, Star Combo Pharma is 1.51 times less risky than Jupiter Energy. It trades about 0.02 of its potential returns per unit of risk. Jupiter Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2.50  in Jupiter Energy on October 11, 2024 and sell it today you would earn a total of  0.40  from holding Jupiter Energy or generate 16.0% return on investment over 90 days.

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

Star Combo Pharma  vs.  Jupiter Energy

Star Combo Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Star Combo Pharma 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 basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Jupiter Energy

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jupiter Energy are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Jupiter Energy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Star Combo and Jupiter Energy

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

The idea behind Star Combo Pharma and Jupiter Energy 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.