Correlation Between Juniper Networks and Boeing

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

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

Diversification Opportunities for Juniper Networks and Boeing

0.54

Correlation Coefficient

Juniper Networks  Boeing

Very weak diversification

The 3 months correlation between Juniper and Boeing is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Networks and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and Juniper Networks 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 Juniper Networks are associated (or correlated) with Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of Juniper Networks i.e., Juniper Networks and Boeing go up and down completely randomly.

Pair Corralation between Juniper Networks and Boeing

Given the investment horizon of 90 days Juniper Networks is expected to under-perform the Boeing. But the stock apears to be less risky and, when comparing its historical volatility, Juniper Networks is 5.39 times less risky than Boeing. The stock trades about -0.22 of its potential returns per unit of risk. The The Boeing is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  17,349  in The Boeing on February 29, 2024 and sell it today you would earn a total of  159.00  from holding The Boeing or generate 0.92% return on investment over 90 days.

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

Juniper Networks  vs.  The Boeing

Juniper Networks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Juniper Networks has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest abnormal performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Boeing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Boeing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Juniper Networks and Boeing

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

The idea behind Juniper Networks and The Boeing 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.