Correlation Between D Wave and Juniper Networks

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

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

Diversification Opportunities for D Wave and Juniper Networks

-0.6

Correlation Coefficient

D Wave  Juniper Networks

Excellent diversification

The 3 months correlation between QBTS and Juniper is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding D Wave Quantum and Juniper Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper Networks and D Wave 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 D Wave Quantum 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 D Wave i.e., D Wave and Juniper Networks go up and down completely randomly.

Pair Corralation between D Wave and Juniper Networks

Given the investment horizon of 90 days D Wave Quantum is expected to generate 10.22 times more return on investment than Juniper Networks. However, D Wave is 10.22 times more volatile than Juniper Networks. It trades about 0.34 of its potential returns per unit of risk. Juniper Networks is currently generating about -0.07 per unit of risk. If you would invest  154.00  in D Wave Quantum on September 13, 2024 and sell it today you would earn a total of  237.00  from holding D Wave Quantum or generate 153.9% return on investment over 90 days.

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

D Wave Quantum  vs.  Juniper Networks

D Wave Quantum

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in D Wave Quantum are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, D Wave unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with D Wave and Juniper Networks

The main advantage of trading using opposite D Wave and Juniper Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if D Wave 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.

The idea behind D Wave Quantum and Juniper Networks 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.