Correlation Between Jupiter Energy and IQVIA Holdings

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

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

Diversification Opportunities for Jupiter Energy and IQVIA Holdings

-0.35

Correlation Coefficient

Jupiter Energy  IQVIA Holdings

Very good diversification

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

Pair Corralation between Jupiter Energy and IQVIA Holdings

Assuming the 90 days horizon Jupiter Energy Limited is expected to generate 83.78 times more return on investment than IQVIA Holdings. However, Jupiter Energy is 83.78 times more volatile than IQVIA Holdings. It trades about 0.18 of its potential returns per unit of risk. IQVIA Holdings is currently generating about -0.13 per unit of risk. If you would invest  0.30  in Jupiter Energy Limited on September 4, 2024 and sell it today you would earn a total of  0.45  from holding Jupiter Energy Limited or generate 150.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Jupiter Energy Limited  vs.  IQVIA Holdings

Jupiter Energy

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jupiter Energy Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Jupiter Energy reported solid returns over the last few months and may actually be approaching a breakup point.

IQVIA Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IQVIA Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Jupiter Energy and IQVIA Holdings

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

The idea behind Jupiter Energy Limited and IQVIA Holdings 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.