Correlation Between Clearfield and Ciena Corp
Can any of the company-specific risk be diversified away by investing in both Clearfield and Ciena Corp 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 Clearfield and Ciena Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearfield and Ciena Corp, you can compare the effects of market volatilities on Clearfield and Ciena Corp 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 Clearfield with a short position of Ciena Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearfield and Ciena Corp.
Diversification Opportunities for Clearfield and Ciena Corp
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clearfield and Ciena is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Clearfield and Ciena Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ciena Corp and Clearfield 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 Clearfield are associated (or correlated) with Ciena Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ciena Corp has no effect on the direction of Clearfield i.e., Clearfield and Ciena Corp go up and down completely randomly.
Pair Corralation between Clearfield and Ciena Corp
Given the investment horizon of 90 days Clearfield is expected to under-perform the Ciena Corp. In addition to that, Clearfield is 1.53 times more volatile than Ciena Corp. It trades about -0.28 of its total potential returns per unit of risk. Ciena Corp is currently generating about 0.22 per unit of volatility. 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearfield vs. Ciena Corp
Performance |
| Timeline |
| Clearfield |
| Ciena Corp |
Clearfield and Ciena Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearfield and Ciena Corp
The main advantage of trading using opposite Clearfield and Ciena Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearfield position performs unexpectedly, Ciena Corp 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 Ciena Corp will offset losses from the drop in Ciena Corp's long position.| Clearfield vs. Ichor Holdings | Clearfield vs. Fabrinet | Clearfield vs. Hello Group | Clearfield vs. Ultra Clean Holdings |
| Ciena Corp vs. Ichor Holdings | Ciena Corp vs. Fabrinet | Ciena Corp vs. Hello Group | Ciena Corp vs. Ultra Clean 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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