Correlation Between Ciena Corp and Wireless Telecom
Can any of the company-specific risk be diversified away by investing in both Ciena Corp and Wireless Telecom 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 Wireless Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ciena Corp and Wireless Telecom Group, you can compare the effects of market volatilities on Ciena Corp and Wireless Telecom 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 Wireless Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ciena Corp and Wireless Telecom.
Diversification Opportunities for Ciena Corp and Wireless Telecom
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ciena and Wireless is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ciena Corp and Wireless Telecom Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Telecom 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 Wireless Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Telecom has no effect on the direction of Ciena Corp i.e., Ciena Corp and Wireless Telecom go up and down completely randomly.
Pair Corralation between Ciena Corp and Wireless Telecom
Given the investment horizon of 90 days Ciena Corp is expected to generate 5.75 times more return on investment than Wireless Telecom. However, Ciena Corp is 5.75 times more volatile than Wireless Telecom Group. It trades about 0.07 of its potential returns per unit of risk. Wireless Telecom Group is currently generating about 0.12 per unit of risk. If you would invest 4,253 in Ciena Corp on August 31, 2024 and sell it today you would earn a total of 2,719 from holding Ciena Corp or generate 63.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 8.29% |
| Values | Daily Returns |
Ciena Corp vs. Wireless Telecom Group
Performance |
| Timeline |
| Ciena Corp |
| Wireless Telecom |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ciena Corp and Wireless Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ciena Corp and Wireless Telecom
The main advantage of trading using opposite Ciena Corp and Wireless Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ciena Corp position performs unexpectedly, Wireless Telecom 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 Wireless Telecom will offset losses from the drop in Wireless Telecom's long position.| Ciena Corp vs. Extreme Networks | Ciena Corp vs. Hewlett Packard Enterprise | Ciena Corp vs. NETGEAR | Ciena Corp vs. Motorola Solutions |
| Wireless Telecom vs. Mobilicom Limited Warrants | Wireless Telecom vs. Siyata Mobile | Wireless Telecom vs. SatixFy Communications | Wireless Telecom vs. Actelis Networks |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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