Correlation Between Juniper Networks and IShares MSCI

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

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

Diversification Opportunities for Juniper Networks and IShares MSCI

-0.59

Correlation Coefficient

Juniper Networks  IShares MSCI

Excellent diversification

The 3 months correlation between Juniper and IShares is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Networks and iShares MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI USA 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI USA has no effect on the direction of Juniper Networks i.e., Juniper Networks and IShares MSCI go up and down completely randomly.

Pair Corralation between Juniper Networks and IShares MSCI

Given the investment horizon of 90 days Juniper Networks is expected to under-perform the IShares MSCI. In addition to that, Juniper Networks is 1.2 times more volatile than iShares MSCI USA. It trades about -0.04 of its total potential returns per unit of risk. iShares MSCI USA is currently generating about 0.12 per unit of volatility. If you would invest  10,425  in iShares MSCI USA on September 12, 2024 and sell it today you would earn a total of  606.00  from holding iShares MSCI USA or generate 5.81% return on investment over 90 days.

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

Juniper Networks  vs.  iShares MSCI USA

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 relatively invariable basic indicators, Juniper Networks is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

iShares MSCI USA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI USA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, IShares MSCI is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Juniper Networks and IShares MSCI

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

The idea behind Juniper Networks and iShares MSCI USA 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.