Correlation Between Shionogi and Jupiter Wellness

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

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

Diversification Opportunities for Shionogi and Jupiter Wellness

0.29

Correlation Coefficient

Shionogi  Jupiter Wellness

Modest diversification

The 3 months correlation between Shionogi and Jupiter is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Shionogi Co and Jupiter Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Wellness and Shionogi 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 Shionogi Co are associated (or correlated) with Jupiter Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Wellness has no effect on the direction of Shionogi i.e., Shionogi and Jupiter Wellness go up and down completely randomly.

Pair Corralation between Shionogi and Jupiter Wellness

If you would invest  4,550  in Shionogi Co on September 18, 2024 and sell it today you would lose (3,133) from holding Shionogi Co or give up 68.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Shionogi Co  vs.  Jupiter Wellness

Shionogi

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shionogi Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Shionogi reported solid returns over the last few months and may actually be approaching a breakup point.

Jupiter Wellness

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jupiter Wellness has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Jupiter Wellness is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Shionogi and Jupiter Wellness

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

The idea behind Shionogi Co and Jupiter Wellness 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.