Correlation Between Western Digital and Juniata Valley

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

By analyzing existing cross correlation between Western Digital and Juniata Valley Financial, you can compare the effects of market volatilities on Western Digital and Juniata Valley 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 Western Digital with a short position of Juniata Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Digital and Juniata Valley.

Diversification Opportunities for Western Digital and Juniata Valley

0.0

Correlation Coefficient

Western Digital  Juniata Valley

Pay attention - limited upside

The 3 months correlation between Western and Juniata is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Digital and Juniata Valley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniata Valley Financial and Western Digital 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 Western Digital are associated (or correlated) with Juniata Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniata Valley Financial has no effect on the direction of Western Digital i.e., Western Digital and Juniata Valley go up and down completely randomly.

Pair Corralation between Western Digital and Juniata Valley

Considering the 90-day investment horizon Western Digital is expected to under-perform the Juniata Valley. In addition to that, Western Digital is 1.62 times more volatile than Juniata Valley Financial. It trades about -0.15 of its total potential returns per unit of risk. Juniata Valley Financial is currently generating about -0.23 per unit of volatility. If you would invest  1,359  in Juniata Valley Financial on October 10, 2024 and sell it today you would lose (106.00) from holding Juniata Valley Financial or give up 7.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Western Digital  vs.  Juniata Valley Financial

Western Digital

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Western Digital are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Western Digital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Juniata Valley Financial

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Juniata Valley Financial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Juniata Valley may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Western Digital and Juniata Valley

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

The idea behind Western Digital and Juniata Valley Financial 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.