Correlation Between Petroleo Brasileiro and Juniper Networks
Can any of the company-specific risk be diversified away by investing in both Petroleo Brasileiro 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 Petroleo Brasileiro and Juniper Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petroleo Brasileiro Petrobras and Juniper Networks, you can compare the effects of market volatilities on Petroleo Brasileiro 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 Petroleo Brasileiro with a short position of Juniper Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petroleo Brasileiro and Juniper Networks.
Diversification Opportunities for Petroleo Brasileiro and Juniper Networks
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Petroleo and Juniper is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Petroleo Brasileiro Petrobras and Juniper Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Networks and Petroleo Brasileiro 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 Petroleo Brasileiro Petrobras 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 Petroleo Brasileiro i.e., Petroleo Brasileiro and Juniper Networks go up and down completely randomly.
Pair Corralation between Petroleo Brasileiro and Juniper Networks
Considering the 90-day investment horizon Petroleo Brasileiro Petrobras is expected to under-perform the Juniper Networks. In addition to that, Petroleo Brasileiro is 1.76 times more volatile than Juniper Networks. It trades about -0.16 of its total potential returns per unit of risk. Juniper Networks is currently generating about 0.21 per unit of volatility. If you would invest 3,568 in Juniper Networks on September 19, 2024 and sell it today you would earn a total of 206.00 from holding Juniper Networks or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Petroleo Brasileiro Petrobras vs. Juniper Networks
Performance |
| Timeline |
| Petroleo Brasileiro |
| Juniper Networks |
Petroleo Brasileiro and Juniper Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petroleo Brasileiro and Juniper Networks
The main advantage of trading using opposite Petroleo Brasileiro and Juniper Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petroleo Brasileiro 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.| Petroleo Brasileiro vs. Ecopetrol SA ADR | Petroleo Brasileiro vs. Equinor ASA ADR | Petroleo Brasileiro vs. Eni SpA ADR | Petroleo Brasileiro vs. Cenovus Energy |
| Juniper Networks vs. Panther Metals PLC | Juniper Networks vs. Jacquet Metal Service | Juniper Networks vs. Blackrock World Mining | Juniper Networks vs. Summit Materials Cl |
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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