Correlation Between Conflux Network and Jupiter

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

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

Diversification Opportunities for Conflux Network and Jupiter

0.35

Correlation Coefficient

Conflux Network  Jupiter

Weak diversification

The 3 months correlation between Conflux and Jupiter is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Conflux Network and Jupiter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter and Conflux Network 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 Conflux Network are associated (or correlated) with Jupiter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter has no effect on the direction of Conflux Network i.e., Conflux Network and Jupiter go up and down completely randomly.

Pair Corralation between Conflux Network and Jupiter

Assuming the 90 days trading horizon Conflux Network is expected to generate 1.0 times less return on investment than Jupiter. In addition to that, Conflux Network is 1.14 times more volatile than Jupiter. It trades about 0.15 of its total potential returns per unit of risk. Jupiter is currently generating about 0.17 per unit of volatility. If you would invest  70.00  in Jupiter on September 2, 2024 and sell it today you would earn a total of  46.00  from holding Jupiter or generate 65.71% return on investment over 90 days.

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

Conflux Network  vs.  Jupiter

Conflux Network

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Conflux Network are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Conflux Network exhibited solid returns over the last few months and may actually be approaching a breakup point.

Jupiter

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jupiter are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Jupiter exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Conflux Network and Jupiter

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

The idea behind Conflux Network and Jupiter 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.