Correlation Between AstroNova and Juniper Networks

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

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

Diversification Opportunities for AstroNova and Juniper Networks

0.3

Correlation Coefficient

AstroNova  Juniper Networks

Weak diversification

The 3 months correlation between AstroNova and Juniper is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding AstroNova and Juniper Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Networks and AstroNova 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 AstroNova 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 AstroNova i.e., AstroNova and Juniper Networks go up and down completely randomly.

Pair Corralation between AstroNova and Juniper Networks

Given the investment horizon of 90 days AstroNova is expected to under-perform the Juniper Networks. In addition to that, AstroNova is 3.11 times more volatile than Juniper Networks. It trades about -0.22 of its total potential returns per unit of risk. Juniper Networks is currently generating about -0.21 per unit of volatility. If you would invest  3,682  in Juniper Networks on January 20, 2024 and sell it today you would lose (66.00) from holding Juniper Networks or give up 1.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

AstroNova  vs.  Juniper Networks

AstroNova

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AstroNova has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AstroNova is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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 relatively invariable basic indicators, Juniper Networks is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with AstroNova and Juniper Networks

The main advantage of trading using opposite AstroNova and Juniper Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstroNova 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.

The idea behind AstroNova and Juniper Networks 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..