Correlation Between Extreme Networks and Juniper Networks
Can any of the company-specific risk be diversified away by investing in both Extreme Networks 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 Extreme Networks and Juniper Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extreme Networks and Juniper Networks, you can compare the effects of market volatilities on Extreme Networks 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 Extreme Networks with a short position of Juniper Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extreme Networks and Juniper Networks.
Diversification Opportunities for Extreme Networks and Juniper Networks
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Extreme and Juniper is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Extreme Networks and Juniper Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Networks and Extreme Networks 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 Extreme Networks 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 Extreme Networks i.e., Extreme Networks and Juniper Networks go up and down completely randomly.
Pair Corralation between Extreme Networks and Juniper Networks
Given the investment horizon of 90 days Extreme Networks is expected to generate 2.88 times more return on investment than Juniper Networks. However, Extreme Networks is 2.88 times more volatile than Juniper Networks. It trades about 0.09 of its potential returns per unit of risk. Juniper Networks is currently generating about -0.35 per unit of risk. If you would invest 1,471 in Extreme Networks on August 24, 2024 and sell it today you would earn a total of 95.00 from holding Extreme Networks or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extreme Networks vs. Juniper Networks
Performance |
| Timeline |
| Extreme Networks |
| Juniper Networks |
Extreme Networks and Juniper Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extreme Networks and Juniper Networks
The main advantage of trading using opposite Extreme Networks and Juniper Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extreme Networks 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.| Extreme Networks vs. Eshallgo Class A | Extreme Networks vs. Amtech Systems | Extreme Networks vs. Gold Fields Ltd | Extreme Networks vs. Aegean Airlines SA |
| Juniper Networks vs. Eshallgo Class A | Juniper Networks vs. Amtech Systems | Juniper Networks vs. Gold Fields Ltd | Juniper Networks vs. Aegean Airlines SA |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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