Correlation Between Juniper Networks and HUMANA

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

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

Diversification Opportunities for Juniper Networks and HUMANA

-0.58

Correlation Coefficient

Juniper Networks  HUMANA

Excellent diversification

The 3 months correlation between Juniper and HUMANA is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Networks and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC 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 HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC has no effect on the direction of Juniper Networks i.e., Juniper Networks and HUMANA go up and down completely randomly.

Pair Corralation between Juniper Networks and HUMANA

Given the investment horizon of 90 days Juniper Networks is expected to generate 1.46 times more return on investment than HUMANA. However, Juniper Networks is 1.46 times more volatile than HUMANA INC. It trades about 0.03 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.06 per unit of risk. If you would invest  3,562  in Juniper Networks on December 2, 2024 and sell it today you would earn a total of  58.00  from holding Juniper Networks or generate 1.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Juniper Networks  vs.  HUMANA INC

Juniper Networks

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Juniper Networks are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

HUMANA INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days HUMANA INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Juniper Networks and HUMANA

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

The idea behind Juniper Networks and HUMANA INC 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.