Correlation Between Gold Fields and Juniper Networks
Can any of the company-specific risk be diversified away by investing in both Gold Fields 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 Gold Fields and Juniper Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Fields Ltd and Juniper Networks, you can compare the effects of market volatilities on Gold Fields 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 Gold Fields with a short position of Juniper Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Juniper Networks.
Diversification Opportunities for Gold Fields and Juniper Networks
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gold and Juniper is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Juniper Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Networks and Gold Fields 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 Gold Fields Ltd 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 Gold Fields i.e., Gold Fields and Juniper Networks go up and down completely randomly.
Pair Corralation between Gold Fields and Juniper Networks
Considering the 90-day investment horizon Gold Fields Ltd is expected to under-perform the Juniper Networks. In addition to that, Gold Fields is 2.23 times more volatile than Juniper Networks. It trades about -0.23 of its total potential returns per unit of risk. Juniper Networks is currently generating about -0.25 per unit of volatility. If you would invest 3,902 in Juniper Networks on August 28, 2024 and sell it today you would lose (282.00) from holding Juniper Networks or give up 7.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Fields Ltd vs. Juniper Networks
Performance |
| Timeline |
| Gold Fields |
| Juniper Networks |
Gold Fields and Juniper Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Juniper Networks
The main advantage of trading using opposite Gold Fields and Juniper Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields 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.| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Kinross Gold | Gold Fields vs. Harmony Gold Mining | Gold Fields vs. Franco Nevada |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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