Correlation Between Ciena Corp and Juniper Networks
Can any of the company-specific risk be diversified away by investing in both Ciena Corp 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 Ciena Corp and Juniper Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ciena Corp and Juniper Networks, you can compare the effects of market volatilities on Ciena Corp 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 Ciena Corp with a short position of Juniper Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ciena Corp and Juniper Networks.
Diversification Opportunities for Ciena Corp and Juniper Networks
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ciena and Juniper is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ciena Corp and Juniper Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Networks and Ciena Corp 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 Ciena Corp 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 Ciena Corp i.e., Ciena Corp and Juniper Networks go up and down completely randomly.
Pair Corralation between Ciena Corp and Juniper Networks
Given the investment horizon of 90 days Ciena Corp is expected to generate 1.56 times more return on investment than Juniper Networks. However, Ciena Corp is 1.56 times more volatile than Juniper Networks. It trades about 0.21 of its potential returns per unit of risk. Juniper Networks is currently generating about -0.29 per unit of risk. If you would invest 6,409 in Ciena Corp on August 27, 2024 and sell it today you would earn a total of 604.00 from holding Ciena Corp or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ciena Corp vs. Juniper Networks
Performance |
| Timeline |
| Ciena Corp |
| Juniper Networks |
Ciena Corp and Juniper Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ciena Corp and Juniper Networks
The main advantage of trading using opposite Ciena Corp and Juniper Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ciena Corp 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.| Ciena Corp vs. Ichor Holdings | Ciena Corp vs. Fabrinet | Ciena Corp vs. Hello Group | Ciena Corp vs. Ultra Clean Holdings |
| Juniper Networks vs. Ichor Holdings | Juniper Networks vs. Fabrinet | Juniper Networks vs. Hello Group | Juniper Networks vs. Ultra Clean Holdings |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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