Correlation Between Global X and Juniper Networks

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

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

Diversification Opportunities for Global X and Juniper Networks

0.53

Correlation Coefficient

Global X  Juniper Networks

Very weak diversification

The 3 months correlation between Global and Juniper is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Juniper Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Networks and Global X 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 Global X Funds 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 Global X i.e., Global X and Juniper Networks go up and down completely randomly.

Pair Corralation between Global X and Juniper Networks

Considering the 90-day investment horizon Global X Funds is expected to generate 1.12 times more return on investment than Juniper Networks. However, Global X is 1.12 times more volatile than Juniper Networks. It trades about 0.03 of its potential returns per unit of risk. Juniper Networks is currently generating about -0.15 per unit of risk. If you would invest  2,622  in Global X Funds on September 5, 2024 and sell it today you would earn a total of  47.00  from holding Global X Funds or generate 1.79% return on investment over 90 days.

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

Global X Funds  vs.  Juniper Networks

Global X Funds

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Funds are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Global X is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 unfluctuating 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.

Pair Trading with Global X and Juniper Networks

The main advantage of trading using opposite Global X and Juniper Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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 Global X Funds 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.