Correlation Between Samsung Electronics and Juniper Networks
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics 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 Samsung Electronics and Juniper Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Juniper Networks, you can compare the effects of market volatilities on Samsung Electronics 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 Samsung Electronics with a short position of Juniper Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Juniper Networks.
Diversification Opportunities for Samsung Electronics and Juniper Networks
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and Juniper is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Juniper Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Networks and Samsung Electronics 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 Samsung Electronics Co 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 Samsung Electronics i.e., Samsung Electronics and Juniper Networks go up and down completely randomly.
Pair Corralation between Samsung Electronics and Juniper Networks
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Juniper Networks. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.45 times less risky than Juniper Networks. The stock trades about -0.29 of its potential returns per unit of risk. The Juniper Networks is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 3,800 in Juniper Networks on November 7, 2024 and sell it today you would lose (246.00) from holding Juniper Networks or give up 6.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Juniper Networks
Performance |
| Timeline |
| Samsung Electronics |
| Juniper Networks |
Samsung Electronics and Juniper Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Juniper Networks
The main advantage of trading using opposite Samsung Electronics and Juniper Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics 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.| Samsung Electronics vs. Auto Trader Group | Samsung Electronics vs. Aptitude Software Group | Samsung Electronics vs. Universal Music Group | Samsung Electronics vs. Travel Leisure Co |
| Juniper Networks vs. Bank of Ireland | Juniper Networks vs. Arrow Electronics | Juniper Networks vs. Compal Electronics GDR | Juniper Networks vs. MG Credit Income |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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