Correlation Between Rockwood Realisation and Jupiter Fund

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

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

Diversification Opportunities for Rockwood Realisation and Jupiter Fund

-0.25

Correlation Coefficient

Rockwood Realisation  Jupiter Fund

Very good diversification

The 3 months correlation between Rockwood and Jupiter is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Rockwood Realisation PLC 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 Rockwood Realisation 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 Rockwood Realisation PLC 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 Rockwood Realisation i.e., Rockwood Realisation and Jupiter Fund go up and down completely randomly.

Pair Corralation between Rockwood Realisation and Jupiter Fund

Assuming the 90 days trading horizon Rockwood Realisation PLC is expected to under-perform the Jupiter Fund. But the stock apears to be less risky and, when comparing its historical volatility, Rockwood Realisation PLC is 4.45 times less risky than Jupiter Fund. The stock trades about -0.32 of its potential returns per unit of risk. The Jupiter Fund Management is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  8,000  in Jupiter Fund Management on April 7, 2024 and sell it today you would earn a total of  450.00  from holding Jupiter Fund Management or generate 5.63% return on investment over 90 days.

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

Rockwood Realisation PLC  vs.  Jupiter Fund Management

Rockwood Realisation PLC

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Rockwood Realisation PLC are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain essential indicators, Rockwood Realisation exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 essential indicators, Jupiter Fund is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Rockwood Realisation and Jupiter Fund

The main advantage of trading using opposite Rockwood Realisation and Jupiter Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rockwood Realisation 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 Rockwood Realisation PLC 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.