Correlation Between DXC Technology and Juniper Networks
Can any of the company-specific risk be diversified away by investing in both DXC Technology 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 DXC Technology and Juniper Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DXC Technology Co and Juniper Networks, you can compare the effects of market volatilities on DXC Technology 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 DXC Technology with a short position of Juniper Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and Juniper Networks.
Diversification Opportunities for DXC Technology and Juniper Networks
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DXC and Juniper is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and Juniper Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Networks and DXC Technology 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 DXC Technology Co 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 DXC Technology i.e., DXC Technology and Juniper Networks go up and down completely randomly.
Pair Corralation between DXC Technology and Juniper Networks
Assuming the 90 days trading horizon DXC Technology Co is expected to generate 2.05 times more return on investment than Juniper Networks. However, DXC Technology is 2.05 times more volatile than Juniper Networks. It trades about 0.23 of its potential returns per unit of risk. Juniper Networks is currently generating about 0.28 per unit of risk. If you would invest 1,921 in DXC Technology Co on September 20, 2024 and sell it today you would earn a total of 233.00 from holding DXC Technology Co or generate 12.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DXC Technology Co vs. Juniper Networks
Performance |
| Timeline |
| DXC Technology |
| Juniper Networks |
DXC Technology and Juniper Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and Juniper Networks
The main advantage of trading using opposite DXC Technology and Juniper Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology 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.| DXC Technology vs. Tatton Asset Management | DXC Technology vs. Coor Service Management | DXC Technology vs. Jupiter Fund Management | DXC Technology vs. Vulcan Materials Co |
| Juniper Networks vs. DXC Technology Co | Juniper Networks vs. Hollywood Bowl Group | Juniper Networks vs. Check Point Software | Juniper Networks vs. Everyman Media Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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