Correlation Between Juniper Networks and Clearfield
Can any of the company-specific risk be diversified away by investing in both Juniper Networks and Clearfield 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 Juniper Networks and Clearfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Juniper Networks and Clearfield, you can compare the effects of market volatilities on Juniper Networks and Clearfield 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 Juniper Networks with a short position of Clearfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juniper Networks and Clearfield.
Diversification Opportunities for Juniper Networks and Clearfield
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Juniper and Clearfield is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Networks and Clearfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearfield and Juniper 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 Juniper Networks are associated (or correlated) with Clearfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearfield has no effect on the direction of Juniper Networks i.e., Juniper Networks and Clearfield go up and down completely randomly.
Pair Corralation between Juniper Networks and Clearfield
Given the investment horizon of 90 days Juniper Networks is expected to generate 0.28 times more return on investment than Clearfield. However, Juniper Networks is 3.54 times less risky than Clearfield. It trades about 0.05 of its potential returns per unit of risk. Clearfield is currently generating about -0.06 per unit of risk. If you would invest 3,401 in Juniper Networks on August 24, 2024 and sell it today you would earn a total of 142.00 from holding Juniper Networks or generate 4.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Juniper Networks vs. Clearfield
Performance |
| Timeline |
| Juniper Networks |
| Clearfield |
Juniper Networks and Clearfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Juniper Networks and Clearfield
The main advantage of trading using opposite Juniper Networks and Clearfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juniper Networks position performs unexpectedly, Clearfield 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 Clearfield will offset losses from the drop in Clearfield's long position.| Juniper Networks vs. Infinera | Juniper Networks vs. Lumentum Holdings | Juniper Networks vs. Extreme Networks | Juniper Networks vs. Clearfield |
| Clearfield vs. Comtech Telecommunications Corp | Clearfield vs. Knowles Cor | Clearfield vs. Extreme Networks | Clearfield vs. KVH Industries |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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