Correlation Between Juniper Networks and Federated Hermes

Can any of the company-specific risk be diversified away by investing in both Juniper Networks and Federated Hermes 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 Juniper Networks and Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Juniper Networks and Federated Hermes ETF, you can compare the effects of market volatilities on Juniper Networks and Federated Hermes 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 Juniper Networks with a short position of Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juniper Networks and Federated Hermes.

Diversification Opportunities for Juniper Networks and Federated Hermes

-0.58

Correlation Coefficient

Juniper Networks  Federated Hermes

Excellent diversification

The 3 months correlation between Juniper and Federated is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Networks and Federated Hermes ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes ETF and Juniper Networks 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 Juniper Networks are associated (or correlated) with Federated Hermes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Hermes ETF has no effect on the direction of Juniper Networks i.e., Juniper Networks and Federated Hermes go up and down completely randomly.

Pair Corralation between Juniper Networks and Federated Hermes

Given the investment horizon of 90 days Juniper Networks is expected to under-perform the Federated Hermes. In addition to that, Juniper Networks is 1.22 times more volatile than Federated Hermes ETF. It trades about -0.15 of its total potential returns per unit of risk. Federated Hermes ETF is currently generating about 0.25 per unit of volatility. If you would invest  2,618  in Federated Hermes ETF on September 4, 2024 and sell it today you would earn a total of  291.00  from holding Federated Hermes ETF or generate 11.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Juniper Networks  vs.  Federated Hermes ETF

Juniper Networks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Juniper Networks has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Federated Hermes ETF

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Hermes ETF are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, Federated Hermes may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Juniper Networks and Federated Hermes

The main advantage of trading using opposite Juniper Networks and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juniper Networks position performs unexpectedly, Federated Hermes 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 Federated Hermes will offset losses from the drop in Federated Hermes' long position.

The idea behind Juniper Networks and Federated Hermes ETF pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.