Correlation Between Juniper Networks and Radware

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

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

Diversification Opportunities for Juniper Networks and Radware

-0.45

Correlation Coefficient

Juniper Networks  Radware

Very good diversification

The 3 months correlation between Juniper and Radware is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Networks and Radware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radware 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 Radware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radware has no effect on the direction of Juniper Networks i.e., Juniper Networks and Radware go up and down completely randomly.

Pair Corralation between Juniper Networks and Radware

Given the investment horizon of 90 days Juniper Networks is expected to under-perform the Radware. But the stock apears to be less risky and, when comparing its historical volatility, Juniper Networks is 2.62 times less risky than Radware. The stock trades about -0.15 of its potential returns per unit of risk. The Radware is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,112  in Radware on September 5, 2024 and sell it today you would earn a total of  230.00  from holding Radware or generate 10.89% return on investment over 90 days.

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

Juniper Networks  vs.  Radware

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.

Radware

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Radware are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Radware may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Juniper Networks and Radware

The main advantage of trading using opposite Juniper Networks and Radware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juniper Networks position performs unexpectedly, Radware 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 Radware will offset losses from the drop in Radware's long position.

The idea behind Juniper Networks and Radware 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.