Correlation Between Juniper Hotels and Paramount Communications
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By analyzing existing cross correlation between Juniper Hotels and Paramount Communications Limited, you can compare the effects of market volatilities on Juniper Hotels and Paramount Communications 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 Hotels with a short position of Paramount Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juniper Hotels and Paramount Communications.
Diversification Opportunities for Juniper Hotels and Paramount Communications
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Juniper and Paramount is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Hotels and Paramount Communications Limit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Communications and Juniper Hotels 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 Hotels are associated (or correlated) with Paramount Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramount Communications has no effect on the direction of Juniper Hotels i.e., Juniper Hotels and Paramount Communications go up and down completely randomly.
Pair Corralation between Juniper Hotels and Paramount Communications
Assuming the 90 days trading horizon Juniper Hotels is expected to under-perform the Paramount Communications. But the stock apears to be less risky and, when comparing its historical volatility, Juniper Hotels is 1.2 times less risky than Paramount Communications. The stock trades about -0.04 of its potential returns per unit of risk. The Paramount Communications Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,105 in Paramount Communications Limited on August 26, 2024 and sell it today you would earn a total of 4,576 from holding Paramount Communications Limited or generate 217.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 37.47% |
| Values | Daily Returns |
Juniper Hotels vs. Paramount Communications Limit
Performance |
| Timeline |
| Juniper Hotels |
| Paramount Communications |
Juniper Hotels and Paramount Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Juniper Hotels and Paramount Communications
The main advantage of trading using opposite Juniper Hotels and Paramount Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juniper Hotels position performs unexpectedly, Paramount Communications 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 Paramount Communications will offset losses from the drop in Paramount Communications' long position.| Juniper Hotels vs. MMTC Limited | Juniper Hotels vs. Kingfa Science Technology | Juniper Hotels vs. Rico Auto Industries | Juniper Hotels vs. GACM Technologies Limited |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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