Correlation Between Juniata Valley and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both Juniata Valley and Arrow Electronics 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 Juniata Valley and Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Juniata Valley Financial and Arrow Electronics, you can compare the effects of market volatilities on Juniata Valley and Arrow Electronics 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 Juniata Valley with a short position of Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juniata Valley and Arrow Electronics.
Diversification Opportunities for Juniata Valley and Arrow Electronics
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Juniata and Arrow is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Juniata Valley Financial and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics and Juniata Valley 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 Juniata Valley Financial are associated (or correlated) with Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Juniata Valley i.e., Juniata Valley and Arrow Electronics go up and down completely randomly.
Pair Corralation between Juniata Valley and Arrow Electronics
Given the investment horizon of 90 days Juniata Valley Financial is expected to generate 2.35 times more return on investment than Arrow Electronics. However, Juniata Valley is 2.35 times more volatile than Arrow Electronics. It trades about 0.01 of its potential returns per unit of risk. Arrow Electronics is currently generating about -0.01 per unit of risk. If you would invest 1,550 in Juniata Valley Financial on August 31, 2024 and sell it today you would lose (200.00) from holding Juniata Valley Financial or give up 12.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.1% |
| Values | Daily Returns |
Juniata Valley Financial vs. Arrow Electronics
Performance |
| Timeline |
| Juniata Valley Financial |
| Arrow Electronics |
Juniata Valley and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Juniata Valley and Arrow Electronics
The main advantage of trading using opposite Juniata Valley and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juniata Valley position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| Juniata Valley vs. FNB Inc | Juniata Valley vs. Apollo Bancorp | Juniata Valley vs. Commercial National Financial | Juniata Valley vs. Eastern Michigan Financial |
| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. Synnex | Arrow Electronics vs. Climb Global Solutions | Arrow Electronics vs. ScanSource |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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