Correlation Between Check Point and Juniper Networks
Can any of the company-specific risk be diversified away by investing in both Check Point 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 Check Point and Juniper Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Check Point Software and Juniper Networks, you can compare the effects of market volatilities on Check Point 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 Check Point with a short position of Juniper Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Juniper Networks.
Diversification Opportunities for Check Point and Juniper Networks
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Check and Juniper is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software and Juniper Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Networks and Check Point 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 Check Point Software 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 Check Point i.e., Check Point and Juniper Networks go up and down completely randomly.
Pair Corralation between Check Point and Juniper Networks
Assuming the 90 days trading horizon Check Point Software is expected to generate 0.89 times more return on investment than Juniper Networks. However, Check Point Software is 1.12 times less risky than Juniper Networks. It trades about 0.06 of its potential returns per unit of risk. Juniper Networks is currently generating about 0.03 per unit of risk. If you would invest 12,859 in Check Point Software on September 24, 2024 and sell it today you would earn a total of 5,834 from holding Check Point Software or generate 45.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.76% |
| Values | Daily Returns |
Check Point Software vs. Juniper Networks
Performance |
| Timeline |
| Check Point Software |
| Juniper Networks |
Check Point and Juniper Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Juniper Networks
The main advantage of trading using opposite Check Point and Juniper Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point 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.| Check Point vs. Toyota Motor Corp | Check Point vs. SoftBank Group Corp | Check Point vs. OTP Bank Nyrt | Check Point vs. Freeport McMoRan |
| Juniper Networks vs. Worldwide Healthcare Trust | Juniper Networks vs. Fidelity National Information | Juniper Networks vs. Silver Bullet Data | Juniper Networks vs. Primary Health Properties |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |