Correlation Between Virgin Wines and Jupiter Fund

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

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

Diversification Opportunities for Virgin Wines and Jupiter Fund

0.47

Correlation Coefficient

Virgin Wines  Jupiter Fund

Very weak diversification

The 3 months correlation between Virgin and Jupiter is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Wines UK 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 Virgin Wines 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 Virgin Wines UK 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 Virgin Wines i.e., Virgin Wines and Jupiter Fund go up and down completely randomly.

Pair Corralation between Virgin Wines and Jupiter Fund

Assuming the 90 days trading horizon Virgin Wines UK is expected to under-perform the Jupiter Fund. But the stock apears to be less risky and, when comparing its historical volatility, Virgin Wines UK is 1.25 times less risky than Jupiter Fund. The stock trades about -0.28 of its potential returns per unit of risk. The Jupiter Fund Management is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8,270  in Jupiter Fund Management on September 14, 2024 and sell it today you would earn a total of  90.00  from holding Jupiter Fund Management or generate 1.09% return on investment over 90 days.

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

Virgin Wines UK  vs.  Jupiter Fund Management

Virgin Wines UK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virgin Wines UK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Jupiter Fund Management

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jupiter Fund Management are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Jupiter Fund is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Virgin Wines and Jupiter Fund

The main advantage of trading using opposite Virgin Wines and Jupiter Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virgin Wines 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 Virgin Wines UK 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.