- Cisco and Juniper are two IT networking equipment suppliers whose exposure to China's lockdowns makes them vulnerable to volatility, in addition to inflationary pressures.
- The relative correlation between their stock prices in 2021 has given way to more divergences from the beginning of this year.
- Embodying this correlation into the ratio of Cisco's share price to Juniper's provides actionable insights into how to trade the two stocks as a pair.
- Actual profits can be made as per the example provided, but it is important to get the timing right due to the number of parameters at play.
- This also means that there are more risks involved than in investing, and, consequently, it may be better to first practice on a simulator before trading big bucks.
For further details see:
Using Cisco-Juniper As A Trading Pair