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
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and Juniper is 0.15. 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 generate 1.29 times more return on investment than Juniper Networks. However, Samsung Electronics is 1.29 times more volatile than Juniper Networks. It trades about -0.01 of its potential returns per unit of risk. Juniper Networks is currently generating about -0.06 per unit of risk. If you would invest 90,450 in Samsung Electronics Co on October 31, 2024 and sell it today you would lose (650.00) from holding Samsung Electronics Co or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| 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. Canadian General Investments | Samsung Electronics vs. Edinburgh Investment Trust | Samsung Electronics vs. Cairn Homes PLC | Samsung Electronics vs. Odfjell Drilling |
| Juniper Networks vs. Silver Bullet Data | Juniper Networks vs. China Pacific Insurance | Juniper Networks vs. Datalogic | Juniper Networks vs. Ecclesiastical Insurance Office |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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