Correlation Between NVIDIA and Juniper Networks
Can any of the company-specific risk be diversified away by investing in both NVIDIA and Juniper Networks 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 NVIDIA and Juniper Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Juniper Networks, you can compare the effects of market volatilities on NVIDIA and Juniper Networks 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 NVIDIA with a short position of Juniper Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Juniper Networks.
Diversification Opportunities for NVIDIA and Juniper Networks
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NVIDIA and Juniper is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Juniper Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Networks and NVIDIA 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 NVIDIA are associated (or correlated) with Juniper Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniper Networks has no effect on the direction of NVIDIA i.e., NVIDIA and Juniper Networks go up and down completely randomly.
Pair Corralation between NVIDIA and Juniper Networks
Given the investment horizon of 90 days NVIDIA is expected to generate 2.01 times more return on investment than Juniper Networks. However, NVIDIA is 2.01 times more volatile than Juniper Networks. It trades about 0.12 of its potential returns per unit of risk. Juniper Networks is currently generating about 0.06 per unit of risk. If you would invest 4,550 in NVIDIA on September 12, 2024 and sell it today you would earn a total of 8,957 from holding NVIDIA or generate 196.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA vs. Juniper Networks
Performance |
| Timeline |
| NVIDIA |
| Juniper Networks |
NVIDIA and Juniper Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Juniper Networks
The main advantage of trading using opposite NVIDIA and Juniper Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, Juniper Networks 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 Juniper Networks will offset losses from the drop in Juniper Networks' long position.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| Juniper Networks vs. Victory Integrity Smallmid Cap | Juniper Networks vs. Hilton Worldwide Holdings | Juniper Networks vs. NVIDIA | Juniper Networks vs. JPMorgan Chase Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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