Correlation Between Ciena Corp and Ultra Clean
Can any of the company-specific risk be diversified away by investing in both Ciena Corp and Ultra Clean 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 Ultra Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ciena Corp and Ultra Clean Holdings, you can compare the effects of market volatilities on Ciena Corp and Ultra Clean 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 Ultra Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ciena Corp and Ultra Clean.
Diversification Opportunities for Ciena Corp and Ultra Clean
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ciena and Ultra is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ciena Corp and Ultra Clean Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Clean Holdings 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 Ultra Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra Clean Holdings has no effect on the direction of Ciena Corp i.e., Ciena Corp and Ultra Clean go up and down completely randomly.
Pair Corralation between Ciena Corp and Ultra Clean
Given the investment horizon of 90 days Ciena Corp is expected to generate 0.69 times more return on investment than Ultra Clean. However, Ciena Corp is 1.45 times less risky than Ultra Clean. It trades about 0.16 of its potential returns per unit of risk. Ultra Clean Holdings is currently generating about 0.08 per unit of risk. If you would invest 6,463 in Ciena Corp on August 31, 2024 and sell it today you would earn a total of 454.00 from holding Ciena Corp or generate 7.02% 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. Ultra Clean Holdings
Performance |
| Timeline |
| Ciena Corp |
| Ultra Clean Holdings |
Ciena Corp and Ultra Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ciena Corp and Ultra Clean
The main advantage of trading using opposite Ciena Corp and Ultra Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ciena Corp position performs unexpectedly, Ultra Clean 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 Ultra Clean will offset losses from the drop in Ultra Clean's long position.| Ciena Corp vs. Extreme Networks | Ciena Corp vs. Hewlett Packard Enterprise | Ciena Corp vs. NETGEAR | Ciena Corp vs. Motorola Solutions |
| Ultra Clean vs. Amtech Systems | Ultra Clean vs. Veeco Instruments | Ultra Clean vs. Cohu Inc | Ultra Clean vs. Onto Innovation |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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