Correlation Between Juniper Networks and Motorola Solutions
Can any of the company-specific risk be diversified away by investing in both Juniper Networks and Motorola Solutions 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 Motorola Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Juniper Networks and Motorola Solutions, you can compare the effects of market volatilities on Juniper Networks and Motorola Solutions 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 Motorola Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juniper Networks and Motorola Solutions.
Diversification Opportunities for Juniper Networks and Motorola Solutions
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Juniper and Motorola is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Networks and Motorola Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motorola Solutions 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 Motorola Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motorola Solutions has no effect on the direction of Juniper Networks i.e., Juniper Networks and Motorola Solutions go up and down completely randomly.
Pair Corralation between Juniper Networks and Motorola Solutions
Given the investment horizon of 90 days Juniper Networks is expected to under-perform the Motorola Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Juniper Networks is 1.41 times less risky than Motorola Solutions. The stock trades about -0.35 of its potential returns per unit of risk. The Motorola Solutions is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 46,708 in Motorola Solutions on August 24, 2024 and sell it today you would earn a total of 2,776 from holding Motorola Solutions or generate 5.94% 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. Motorola Solutions
Performance |
| Timeline |
| Juniper Networks |
| Motorola Solutions |
Juniper Networks and Motorola Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Juniper Networks and Motorola Solutions
The main advantage of trading using opposite Juniper Networks and Motorola Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juniper Networks position performs unexpectedly, Motorola Solutions 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 Motorola Solutions will offset losses from the drop in Motorola Solutions' long position.| Juniper Networks vs. Infinera | Juniper Networks vs. Lumentum Holdings | Juniper Networks vs. Extreme Networks | Juniper Networks vs. Clearfield |
| Motorola Solutions vs. Ciena Corp | Motorola Solutions vs. Extreme Networks | Motorola Solutions vs. Hewlett Packard Enterprise | Motorola Solutions vs. NETGEAR |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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