Correlation Between Summit Materials and Juniper Networks
Can any of the company-specific risk be diversified away by investing in both Summit Materials 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 Summit Materials and Juniper Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials Cl and Juniper Networks, you can compare the effects of market volatilities on Summit Materials 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 Summit Materials with a short position of Juniper Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Juniper Networks.
Diversification Opportunities for Summit Materials and Juniper Networks
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Summit and Juniper is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials Cl and Juniper Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Networks and Summit Materials 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 Summit Materials Cl 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 Summit Materials i.e., Summit Materials and Juniper Networks go up and down completely randomly.
Pair Corralation between Summit Materials and Juniper Networks
Assuming the 90 days trading horizon Summit Materials is expected to generate 1.19 times less return on investment than Juniper Networks. In addition to that, Summit Materials is 1.35 times more volatile than Juniper Networks. It trades about 0.17 of its total potential returns per unit of risk. Juniper Networks is currently generating about 0.28 per unit of volatility. If you would invest 3,517 in Juniper Networks on September 20, 2024 and sell it today you would earn a total of 257.00 from holding Juniper Networks or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Materials Cl vs. Juniper Networks
Performance |
| Timeline |
| Summit Materials |
| Juniper Networks |
Summit Materials and Juniper Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Juniper Networks
The main advantage of trading using opposite Summit Materials and Juniper Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials 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.| Summit Materials vs. Samsung Electronics Co | Summit Materials vs. Samsung Electronics Co | Summit Materials vs. Hyundai Motor | Summit Materials vs. Reliance Industries Ltd |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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