Correlation Between Tower Semiconductor and Jupiter Fund

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

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

Diversification Opportunities for Tower Semiconductor and Jupiter Fund

0.17

Correlation Coefficient

Tower Semiconductor  Jupiter Fund

Average diversification

The 3 months correlation between Tower and Jupiter is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Tower Semiconductor 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 Tower Semiconductor 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 Tower Semiconductor 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 Tower Semiconductor i.e., Tower Semiconductor and Jupiter Fund go up and down completely randomly.

Pair Corralation between Tower Semiconductor and Jupiter Fund

Assuming the 90 days horizon Tower Semiconductor is expected to generate 1.4 times more return on investment than Jupiter Fund. However, Tower Semiconductor is 1.4 times more volatile than Jupiter Fund Management. It trades about 0.13 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  4,026  in Tower Semiconductor on October 25, 2024 and sell it today you would earn a total of  974.00  from holding Tower Semiconductor or generate 24.19% return on investment over 90 days.

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

Tower Semiconductor  vs.  Jupiter Fund Management

Tower Semiconductor

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tower Semiconductor are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Tower Semiconductor reported solid returns over the last few months and may actually be approaching a breakup point.

Jupiter Fund Management

Risk-Adjusted Performance

0 of 100

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 fragile 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 Tower Semiconductor and Jupiter Fund

The main advantage of trading using opposite Tower Semiconductor and Jupiter Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower Semiconductor 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 Tower Semiconductor 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.