Correlation Between Juniper Networks and Lumentum Holdings
Can any of the company-specific risk be diversified away by investing in both Juniper Networks and Lumentum 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 Juniper Networks and Lumentum Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Juniper Networks and Lumentum Holdings, you can compare the effects of market volatilities on Juniper Networks and Lumentum 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 Juniper Networks with a short position of Lumentum Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juniper Networks and Lumentum Holdings.
Diversification Opportunities for Juniper Networks and Lumentum Holdings
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Juniper and Lumentum is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Networks and Lumentum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumentum Holdings 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 Lumentum Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumentum Holdings has no effect on the direction of Juniper Networks i.e., Juniper Networks and Lumentum Holdings go up and down completely randomly.
Pair Corralation between Juniper Networks and Lumentum Holdings
Given the investment horizon of 90 days Juniper Networks is expected to generate 0.27 times more return on investment than Lumentum Holdings. However, Juniper Networks is 3.65 times less risky than Lumentum Holdings. It trades about -0.42 of its potential returns per unit of risk. Lumentum Holdings is currently generating about -0.17 per unit of risk. If you would invest 3,691 in Juniper Networks on February 2, 2024 and sell it today you would lose (202.00) from holding Juniper Networks or give up 5.47% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Juniper Networks vs. Lumentum Holdings
Performance |
Timeline |
Juniper Networks |
Lumentum Holdings |
Juniper Networks and Lumentum Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Juniper Networks and Lumentum Holdings
The main advantage of trading using opposite Juniper Networks and Lumentum Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juniper Networks position performs unexpectedly, Lumentum 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 Lumentum Holdings will offset losses from the drop in Lumentum Holdings' long position.Juniper Networks vs. Nokia Corp ADR | Juniper Networks vs. Motorola Solutions | Juniper Networks vs. Ciena Corp | Juniper Networks vs. Hewlett Packard Enterprise |
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Check out your portfolio center.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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