Correlation Between Juniper Networks and Knowles Cor
Can any of the company-specific risk be diversified away by investing in both Juniper Networks and Knowles Cor 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 Knowles Cor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Juniper Networks and Knowles Cor, you can compare the effects of market volatilities on Juniper Networks and Knowles Cor 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 Knowles Cor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juniper Networks and Knowles Cor.
Diversification Opportunities for Juniper Networks and Knowles Cor
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Juniper and Knowles is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Networks and Knowles Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knowles Cor 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 Knowles Cor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knowles Cor has no effect on the direction of Juniper Networks i.e., Juniper Networks and Knowles Cor go up and down completely randomly.
Pair Corralation between Juniper Networks and Knowles Cor
Given the investment horizon of 90 days Juniper Networks is expected to generate 0.24 times more return on investment than Knowles Cor. However, Juniper Networks is 4.2 times less risky than Knowles Cor. It trades about -0.12 of its potential returns per unit of risk. Knowles Cor is currently generating about -0.06 per unit of risk. If you would invest 3,701 in Juniper Networks on January 25, 2024 and sell it today you would lose (113.00) from holding Juniper Networks or give up 3.05% 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. Knowles Cor
Performance |
Timeline |
Juniper Networks |
Knowles Cor |
Juniper Networks and Knowles Cor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Juniper Networks and Knowles Cor
The main advantage of trading using opposite Juniper Networks and Knowles Cor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juniper Networks position performs unexpectedly, Knowles Cor 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 Knowles Cor will offset losses from the drop in Knowles Cor's long position.Juniper Networks vs. Desktop Metal | Juniper Networks vs. Fabrinet | Juniper Networks vs. Kimball Electronics | Juniper Networks vs. Knowles Cor |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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