Correlation Between Juniper Networks and Desktop Metal
Can any of the company-specific risk be diversified away by investing in both Juniper Networks and Desktop Metal 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 Desktop Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Juniper Networks and Desktop Metal, you can compare the effects of market volatilities on Juniper Networks and Desktop Metal 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 Desktop Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juniper Networks and Desktop Metal.
Diversification Opportunities for Juniper Networks and Desktop Metal
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Juniper and Desktop is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Networks and Desktop Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desktop Metal 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 Desktop Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desktop Metal has no effect on the direction of Juniper Networks i.e., Juniper Networks and Desktop Metal go up and down completely randomly.
Pair Corralation between Juniper Networks and Desktop Metal
Given the investment horizon of 90 days Juniper Networks is expected to generate 0.19 times more return on investment than Desktop Metal. However, Juniper Networks is 5.32 times less risky than Desktop Metal. It trades about 0.24 of its potential returns per unit of risk. Desktop Metal is currently generating about -0.55 per unit of risk. If you would invest 3,598 in Juniper Networks on September 26, 2024 and sell it today you would earn a total of 152.00 from holding Juniper Networks or generate 4.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Juniper Networks vs. Desktop Metal
Performance |
Timeline |
Juniper Networks |
Desktop Metal |
Juniper Networks and Desktop Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Juniper Networks and Desktop Metal
The main advantage of trading using opposite Juniper Networks and Desktop Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juniper Networks position performs unexpectedly, Desktop Metal 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 Desktop Metal will offset losses from the drop in Desktop Metal's long position.Juniper Networks vs. Infinera | Juniper Networks vs. Lumentum Holdings | Juniper Networks vs. Extreme Networks | Juniper Networks vs. Clearfield |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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