Correlation Between Digi International and Juniper Networks
Can any of the company-specific risk be diversified away by investing in both Digi International 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 Digi International and Juniper Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and Juniper Networks, you can compare the effects of market volatilities on Digi International 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 Digi International with a short position of Juniper Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and Juniper Networks.
Diversification Opportunities for Digi International and Juniper Networks
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Digi and Juniper is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and Juniper Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Networks and Digi International 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 Digi International 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 Digi International i.e., Digi International and Juniper Networks go up and down completely randomly.
Pair Corralation between Digi International and Juniper Networks
Given the investment horizon of 90 days Digi International is expected to under-perform the Juniper Networks. In addition to that, Digi International is 1.73 times more volatile than Juniper Networks. It trades about -0.01 of its total potential returns per unit of risk. Juniper Networks is currently generating about 0.02 per unit of volatility. If you would invest 3,101 in Juniper Networks on August 24, 2024 and sell it today you would earn a total of 442.00 from holding Juniper Networks or generate 14.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digi International vs. Juniper Networks
Performance |
| Timeline |
| Digi International |
| Juniper Networks |
Digi International and Juniper Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and Juniper Networks
The main advantage of trading using opposite Digi International and Juniper Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International 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.| Digi International vs. NETGEAR | Digi International vs. Small Cap Core | Digi International vs. Morningstar Unconstrained Allocation | Digi International vs. Mutual Of America |
| Juniper Networks vs. Infinera | Juniper Networks vs. Lumentum Holdings | Juniper Networks vs. Extreme Networks | Juniper Networks vs. Clearfield |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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