Correlation Between Wheaton Precious and Jupiter Fund

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

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

Diversification Opportunities for Wheaton Precious and Jupiter Fund

-0.33

Correlation Coefficient

Wheaton Precious  Jupiter Fund

Very good diversification

The 3 months correlation between Wheaton and Jupiter is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals 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 Wheaton Precious 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 Wheaton Precious Metals 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 Wheaton Precious i.e., Wheaton Precious and Jupiter Fund go up and down completely randomly.

Pair Corralation between Wheaton Precious and Jupiter Fund

Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 1.21 times more return on investment than Jupiter Fund. However, Wheaton Precious is 1.21 times more volatile than Jupiter Fund Management. It trades about 0.04 of its potential returns per unit of risk. Jupiter Fund Management is currently generating about 0.03 per unit of risk. If you would invest  375,205  in Wheaton Precious Metals on September 23, 2024 and sell it today you would earn a total of  89,295  from holding Wheaton Precious Metals or generate 23.8% return on investment over 90 days.

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

Wheaton Precious Metals  vs.  Jupiter Fund Management

Wheaton Precious Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wheaton Precious Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Wheaton Precious is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with Wheaton Precious and Jupiter Fund

The main advantage of trading using opposite Wheaton Precious and Jupiter Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious 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 Wheaton Precious Metals 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.