Correlation Between Applied Opt and Infinera
Can any of the company-specific risk be diversified away by investing in both Applied Opt and Infinera 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 Applied Opt and Infinera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Opt and Infinera, you can compare the effects of market volatilities on Applied Opt and Infinera 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 Applied Opt with a short position of Infinera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Opt and Infinera.
Diversification Opportunities for Applied Opt and Infinera
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Applied and Infinera is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Applied Opt and Infinera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinera and Applied Opt 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 Applied Opt are associated (or correlated) with Infinera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinera has no effect on the direction of Applied Opt i.e., Applied Opt and Infinera go up and down completely randomly.
Pair Corralation between Applied Opt and Infinera
Given the investment horizon of 90 days Applied Opt is expected to under-perform the Infinera. In addition to that, Applied Opt is 20.38 times more volatile than Infinera. It trades about -0.16 of its total potential returns per unit of risk. Infinera is currently generating about 0.15 per unit of volatility. If you would invest 657.00 in Infinera on November 1, 2024 and sell it today you would earn a total of 7.00 from holding Infinera or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Opt vs. Infinera
Performance |
| Timeline |
| Applied Opt |
| Infinera |
Applied Opt and Infinera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Opt and Infinera
The main advantage of trading using opposite Applied Opt and Infinera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Opt position performs unexpectedly, Infinera 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 Infinera will offset losses from the drop in Infinera's long position.| Applied Opt vs. Lumentum Holdings | Applied Opt vs. Ichor Holdings | Applied Opt vs. Fabrinet | Applied Opt vs. Hello Group |
| Infinera vs. Comtech Telecommunications Corp | Infinera vs. Silicom | Infinera vs. Knowles Cor | Infinera vs. Mynaric AG ADR |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |