Correlation Between Ciena Corp and Casa Systems
Can any of the company-specific risk be diversified away by investing in both Ciena Corp and Casa 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 Ciena Corp and Casa Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ciena Corp and Casa Systems, you can compare the effects of market volatilities on Ciena Corp and Casa 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 Ciena Corp with a short position of Casa Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ciena Corp and Casa Systems.
Diversification Opportunities for Ciena Corp and Casa Systems
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ciena and Casa is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ciena Corp and Casa Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casa Systems and Ciena Corp 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 Ciena Corp are associated (or correlated) with Casa Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casa Systems has no effect on the direction of Ciena Corp i.e., Ciena Corp and Casa Systems go up and down completely randomly.
Pair Corralation between Ciena Corp and Casa Systems
If you would invest 4,785 in Ciena Corp on August 28, 2024 and sell it today you would earn a total of 2,233 from holding Ciena Corp or generate 46.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Ciena Corp vs. Casa Systems
Performance |
| Timeline |
| Ciena Corp |
| Casa Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ciena Corp and Casa Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ciena Corp and Casa Systems
The main advantage of trading using opposite Ciena Corp and Casa Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ciena Corp position performs unexpectedly, Casa 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 Casa Systems will offset losses from the drop in Casa Systems' long position.| Ciena Corp vs. Extreme Networks | Ciena Corp vs. Hewlett Packard Enterprise | Ciena Corp vs. NETGEAR | Ciena Corp vs. Motorola Solutions |
| Casa Systems vs. ADTRAN Inc | Casa Systems vs. Comtech Telecommunications Corp | Casa Systems vs. Digi International | Casa Systems vs. KVH Industries |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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