Correlation Between Optical Cable and ClearOne
Can any of the company-specific risk be diversified away by investing in both Optical Cable and ClearOne 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 Optical Cable and ClearOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optical Cable and ClearOne, you can compare the effects of market volatilities on Optical Cable and ClearOne 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 Optical Cable with a short position of ClearOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optical Cable and ClearOne.
Diversification Opportunities for Optical Cable and ClearOne
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Optical and ClearOne is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Optical Cable and ClearOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearOne and Optical Cable 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 Optical Cable are associated (or correlated) with ClearOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearOne has no effect on the direction of Optical Cable i.e., Optical Cable and ClearOne go up and down completely randomly.
Pair Corralation between Optical Cable and ClearOne
Considering the 90-day investment horizon Optical Cable is expected to generate 6.81 times more return on investment than ClearOne. However, Optical Cable is 6.81 times more volatile than ClearOne. It trades about 0.06 of its potential returns per unit of risk. ClearOne is currently generating about 0.04 per unit of risk. If you would invest 256.00 in Optical Cable on August 24, 2024 and sell it today you would lose (16.00) from holding Optical Cable or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optical Cable vs. ClearOne
Performance |
| Timeline |
| Optical Cable |
| ClearOne |
Optical Cable and ClearOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optical Cable and ClearOne
The main advantage of trading using opposite Optical Cable and ClearOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optical Cable position performs unexpectedly, ClearOne 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 ClearOne will offset losses from the drop in ClearOne's long position.| Optical Cable vs. KVH Industries | Optical Cable vs. Knowles Cor | Optical Cable vs. Comtech Telecommunications Corp | Optical Cable vs. Lantronix |
| ClearOne vs. Frequency Electronics | ClearOne vs. Actelis Networks | ClearOne vs. Optical Cable | ClearOne vs. Lantronix |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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