Correlation Between PPL and Juniper Networks
Can any of the company-specific risk be diversified away by investing in both PPL and Juniper Networks 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 PPL and Juniper Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPL Corporation and Juniper Networks, you can compare the effects of market volatilities on PPL and Juniper Networks 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 PPL with a short position of Juniper Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPL and Juniper Networks.
Diversification Opportunities for PPL and Juniper Networks
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PPL and Juniper is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding PPL Corp. and Juniper Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Networks and PPL 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 PPL Corporation are associated (or correlated) with Juniper Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniper Networks has no effect on the direction of PPL i.e., PPL and Juniper Networks go up and down completely randomly.
Pair Corralation between PPL and Juniper Networks
Considering the 90-day investment horizon PPL is expected to generate 2.1 times less return on investment than Juniper Networks. But when comparing it to its historical volatility, PPL Corporation is 1.71 times less risky than Juniper Networks. It trades about 0.09 of its potential returns per unit of risk. Juniper Networks is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,714 in Juniper Networks on January 24, 2024 and sell it today you would earn a total of 897.00 from holding Juniper Networks or generate 33.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PPL Corp. vs. Juniper Networks
Performance |
| Timeline |
| PPL Corporation |
| Juniper Networks |
PPL and Juniper Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPL and Juniper Networks
The main advantage of trading using opposite PPL and Juniper Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPL position performs unexpectedly, Juniper Networks 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 Juniper Networks will offset losses from the drop in Juniper Networks' long position.| PPL vs. Centrais Eltricas Brasileiras | PPL vs. Central Puerto SA | PPL vs. CMS Energy | PPL vs. Centrais Electricas Brasileiras |
| Juniper Networks vs. Desktop Metal | Juniper Networks vs. Fabrinet | Juniper Networks vs. Kimball Electronics | Juniper Networks vs. Knowles Cor |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |