Correlation Between Berkshire Hathaway and Juniper Networks
Can any of the company-specific risk be diversified away by investing in both Berkshire Hathaway 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 Berkshire Hathaway and Juniper Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hathaway and Juniper Networks, you can compare the effects of market volatilities on Berkshire Hathaway 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 Berkshire Hathaway with a short position of Juniper Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hathaway and Juniper Networks.
Diversification Opportunities for Berkshire Hathaway and Juniper Networks
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Berkshire and Juniper is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hathaway and Juniper Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Networks and Berkshire Hathaway 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 Berkshire Hathaway 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 Berkshire Hathaway i.e., Berkshire Hathaway and Juniper Networks go up and down completely randomly.
Pair Corralation between Berkshire Hathaway and Juniper Networks
Assuming the 90 days trading horizon Berkshire Hathaway is expected to generate 0.85 times more return on investment than Juniper Networks. However, Berkshire Hathaway is 1.18 times less risky than Juniper Networks. It trades about 0.1 of its potential returns per unit of risk. Juniper Networks is currently generating about -0.15 per unit of risk. If you would invest 45,550 in Berkshire Hathaway on November 7, 2024 and sell it today you would earn a total of 1,550 from holding Berkshire Hathaway or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Berkshire Hathaway vs. Juniper Networks
Performance |
| Timeline |
| Berkshire Hathaway |
| Juniper Networks |
Berkshire Hathaway and Juniper Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hathaway and Juniper Networks
The main advantage of trading using opposite Berkshire Hathaway and Juniper Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hathaway 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.| Berkshire Hathaway vs. Worldwide Healthcare Trust | Berkshire Hathaway vs. UNIQA Insurance Group | Berkshire Hathaway vs. Roebuck Food Group | Berkshire Hathaway vs. Induction Healthcare Group |
| Juniper Networks vs. Bank of Ireland | Juniper Networks vs. Arrow Electronics | Juniper Networks vs. Compal Electronics GDR | Juniper Networks vs. MG Credit Income |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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