Correlation Between Juniper Networks and Harmonic

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

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

Diversification Opportunities for Juniper Networks and Harmonic

0.41

Correlation Coefficient

Juniper Networks  Harmonic

Very weak diversification

The 3 months correlation between Juniper and Harmonic is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Networks and Harmonic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmonic 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 Harmonic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmonic has no effect on the direction of Juniper Networks i.e., Juniper Networks and Harmonic go up and down completely randomly.

Pair Corralation between Juniper Networks and Harmonic

Given the investment horizon of 90 days Juniper Networks is expected to generate 1.29 times less return on investment than Harmonic. But when comparing it to its historical volatility, Juniper Networks is 2.14 times less risky than Harmonic. It trades about 0.02 of its potential returns per unit of risk. Harmonic is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,319  in Harmonic on September 3, 2024 and sell it today you would lose (37.00) from holding Harmonic or give up 2.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Juniper Networks  vs.  Harmonic

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.

Harmonic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harmonic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Harmonic is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Juniper Networks and Harmonic

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

The idea behind Juniper Networks and Harmonic 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.