Correlation Between Jupiter Fund and Host Hotels

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

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

Diversification Opportunities for Jupiter Fund and Host Hotels

0.13

Correlation Coefficient

Jupiter Fund  Host Hotels

Average diversification

The 3 months correlation between Jupiter and Host is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Jupiter Fund Management and Host Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Host Hotels Resorts and Jupiter Fund 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 Fund Management are associated (or correlated) with Host Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Host Hotels Resorts has no effect on the direction of Jupiter Fund i.e., Jupiter Fund and Host Hotels go up and down completely randomly.

Pair Corralation between Jupiter Fund and Host Hotels

Assuming the 90 days trading horizon Jupiter Fund Management is expected to generate 1.19 times more return on investment than Host Hotels. However, Jupiter Fund is 1.19 times more volatile than Host Hotels Resorts. It trades about 0.1 of its potential returns per unit of risk. Host Hotels Resorts is currently generating about -0.13 per unit of risk. If you would invest  8,320  in Jupiter Fund Management on September 24, 2024 and sell it today you would earn a total of  260.00  from holding Jupiter Fund Management or generate 3.13% return on investment over 90 days.

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

Jupiter Fund Management  vs.  Host Hotels Resorts

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. In spite of rather sound technical and fundamental indicators, Jupiter Fund is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Host Hotels Resorts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Host Hotels Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Host Hotels is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Jupiter Fund and Host Hotels

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

The idea behind Jupiter Fund Management and Host Hotels Resorts 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.