Correlation Between Juniper Networks and Cisco Systems
Can any of the company-specific risk be diversified away by investing in both Juniper Networks and Cisco Systems 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 Cisco Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Juniper Networks and Cisco Systems, you can compare the effects of market volatilities on Juniper Networks and Cisco Systems 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 Cisco Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juniper Networks and Cisco Systems.
Diversification Opportunities for Juniper Networks and Cisco Systems
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Juniper and Cisco is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Networks and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems 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 Cisco Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cisco Systems has no effect on the direction of Juniper Networks i.e., Juniper Networks and Cisco Systems go up and down completely randomly.
Pair Corralation between Juniper Networks and Cisco Systems
Given the investment horizon of 90 days Juniper Networks is expected to under-perform the Cisco Systems. But the stock apears to be less risky and, when comparing its historical volatility, Juniper Networks is 3.5 times less risky than Cisco Systems. The stock trades about -0.03 of its potential returns per unit of risk. The Cisco Systems is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 6,342 in Cisco Systems on March 21, 2025 and sell it today you would earn a total of 242.00 from holding Cisco Systems or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Juniper Networks vs. Cisco Systems
Performance |
| Timeline |
| Juniper Networks |
| Cisco Systems |
Juniper Networks and Cisco Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Juniper Networks and Cisco Systems
The main advantage of trading using opposite Juniper Networks and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Juniper Networks position performs unexpectedly, Cisco Systems 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 Cisco Systems will offset losses from the drop in Cisco Systems' long position.| Juniper Networks vs. Lumentum Holdings | Juniper Networks vs. Extreme Networks | Juniper Networks vs. Clearfield | Juniper Networks vs. NETGEAR |
| Cisco Systems vs. ADTRAN Inc | Cisco Systems vs. KVH Industries | Cisco Systems vs. Telesat Corp | Cisco Systems vs. Digi International |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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