Correlation Between Juniper Networks and Hewlett Packard
Can any of the company-specific risk be diversified away by investing in both Juniper Networks and Hewlett Packard 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 Hewlett Packard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Juniper Networks and Hewlett Packard Enterprise, you can compare the effects of market volatilities on Juniper Networks and Hewlett Packard 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 Hewlett Packard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juniper Networks and Hewlett Packard.
Diversification Opportunities for Juniper Networks and Hewlett Packard
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Juniper and Hewlett is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Networks and Hewlett Packard Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hewlett Packard Ente 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 Hewlett Packard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hewlett Packard Ente has no effect on the direction of Juniper Networks i.e., Juniper Networks and Hewlett Packard go up and down completely randomly.
Pair Corralation between Juniper Networks and Hewlett Packard
Given the investment horizon of 90 days Juniper Networks is expected to under-perform the Hewlett Packard. But the stock apears to be less risky and, when comparing its historical volatility, Juniper Networks is 1.74 times less risky than Hewlett Packard. The stock trades about -0.35 of its potential returns per unit of risk. The Hewlett Packard Enterprise is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,931 in Hewlett Packard Enterprise on August 24, 2024 and sell it today you would earn a total of 243.00 from holding Hewlett Packard Enterprise or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Juniper Networks vs. Hewlett Packard Enterprise
Performance |
| Timeline |
| Juniper Networks |
| Hewlett Packard Ente |
Juniper Networks and Hewlett Packard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Juniper Networks and Hewlett Packard
The main advantage of trading using opposite Juniper Networks and Hewlett Packard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juniper Networks position performs unexpectedly, Hewlett Packard 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 Hewlett Packard will offset losses from the drop in Hewlett Packard's long position.| Juniper Networks vs. Infinera | Juniper Networks vs. Lumentum Holdings | Juniper Networks vs. Extreme Networks | Juniper Networks vs. Clearfield |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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