Correlation Between Northern Trust and Jupai Holdings

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

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

Diversification Opportunities for Northern Trust and Jupai Holdings

0.0

Correlation Coefficient

Northern Trust  Jupai Holdings

Pay attention - limited upside

The 3 months correlation between Northern and Jupai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Northern Trust and Jupai Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupai Holdings and Northern Trust 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 Northern Trust are associated (or correlated) with Jupai Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupai Holdings has no effect on the direction of Northern Trust i.e., Northern Trust and Jupai Holdings go up and down completely randomly.

Pair Corralation between Northern Trust and Jupai Holdings

If you would invest (100.00) in Jupai Holdings on January 25, 2024 and sell it today you would earn a total of  100.00  from holding Jupai Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Northern Trust  vs.  Jupai Holdings

Northern Trust

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Northern Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Northern Trust is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Jupai Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jupai Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Jupai Holdings is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Northern Trust and Jupai Holdings

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

The idea behind Northern Trust and Jupai 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.