Correlation Between Primary Health and Juniper Networks
Can any of the company-specific risk be diversified away by investing in both Primary Health 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 Primary Health and Juniper Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Primary Health Properties and Juniper Networks, you can compare the effects of market volatilities on Primary Health 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 Primary Health with a short position of Juniper Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primary Health and Juniper Networks.
Diversification Opportunities for Primary Health and Juniper Networks
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Primary and Juniper is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Primary Health Properties and Juniper Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Networks and Primary Health 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 Primary Health Properties 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 Primary Health i.e., Primary Health and Juniper Networks go up and down completely randomly.
Pair Corralation between Primary Health and Juniper Networks
Assuming the 90 days trading horizon Primary Health Properties is expected to under-perform the Juniper Networks. But the stock apears to be less risky and, when comparing its historical volatility, Primary Health Properties is 1.48 times less risky than Juniper Networks. The stock trades about -0.19 of its potential returns per unit of risk. The Juniper Networks is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,596 in Juniper Networks on September 24, 2024 and sell it today you would earn a total of 148.00 from holding Juniper Networks or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Primary Health Properties vs. Juniper Networks
Performance |
| Timeline |
| Primary Health Properties |
| Juniper Networks |
Primary Health and Juniper Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Primary Health and Juniper Networks
The main advantage of trading using opposite Primary Health and Juniper Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primary Health 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.| Primary Health vs. Planet Fitness Cl | Primary Health vs. Worldwide Healthcare Trust | Primary Health vs. Abingdon Health Plc | Primary Health vs. Lowland Investment Co |
| Juniper Networks vs. Worldwide Healthcare Trust | Juniper Networks vs. Fidelity National Information | Juniper Networks vs. Silver Bullet Data | Juniper Networks vs. Primary Health Properties |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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