Correlation Between Ciena Corp and Hello
Can any of the company-specific risk be diversified away by investing in both Ciena Corp and Hello 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 Hello into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ciena Corp and Hello Group, you can compare the effects of market volatilities on Ciena Corp and Hello 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 Hello. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ciena Corp and Hello.
Diversification Opportunities for Ciena Corp and Hello
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ciena and Hello is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ciena Corp and Hello Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hello Group 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 Hello. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hello Group has no effect on the direction of Ciena Corp i.e., Ciena Corp and Hello go up and down completely randomly.
Pair Corralation between Ciena Corp and Hello
Given the investment horizon of 90 days Ciena Corp is expected to generate 0.94 times more return on investment than Hello. However, Ciena Corp is 1.06 times less risky than Hello. It trades about 0.22 of its potential returns per unit of risk. Hello Group is currently generating about -0.18 per unit of risk. If you would invest 6,409 in Ciena Corp on August 28, 2024 and sell it today you would earn a total of 609.00 from holding Ciena Corp or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ciena Corp vs. Hello Group
Performance |
| Timeline |
| Ciena Corp |
| Hello Group |
Ciena Corp and Hello Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ciena Corp and Hello
The main advantage of trading using opposite Ciena Corp and Hello positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ciena Corp position performs unexpectedly, Hello 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 Hello will offset losses from the drop in Hello's long position.| Ciena Corp vs. Ichor Holdings | Ciena Corp vs. Fabrinet | Ciena Corp vs. Hello Group | Ciena Corp vs. Ultra Clean Holdings |
| Hello vs. Weibo Corp | Hello vs. Autohome | Hello vs. Tencent Music Entertainment | Hello vs. DouYu International Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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