Correlation Between Optical Cable and Infinera
Can any of the company-specific risk be diversified away by investing in both Optical Cable and Infinera 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 Infinera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optical Cable and Infinera, you can compare the effects of market volatilities on Optical Cable and Infinera 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 Infinera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optical Cable and Infinera.
Diversification Opportunities for Optical Cable and Infinera
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Optical and Infinera is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Optical Cable and Infinera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinera 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 Infinera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinera has no effect on the direction of Optical Cable i.e., Optical Cable and Infinera go up and down completely randomly.
Pair Corralation between Optical Cable and Infinera
Considering the 90-day investment horizon Optical Cable is expected to under-perform the Infinera. In addition to that, Optical Cable is 15.4 times more volatile than Infinera. It trades about -0.18 of its total potential returns per unit of risk. Infinera is currently generating about 0.11 per unit of volatility. If you would invest 661.00 in Infinera on November 29, 2024 and sell it today you would earn a total of 4.00 from holding Infinera or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optical Cable vs. Infinera
Performance |
| Timeline |
| Optical Cable |
| Infinera |
Optical Cable and Infinera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optical Cable and Infinera
The main advantage of trading using opposite Optical Cable and Infinera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optical Cable position performs unexpectedly, Infinera 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 Infinera will offset losses from the drop in Infinera's long position.| Optical Cable vs. KVH Industries | Optical Cable vs. Knowles Cor | Optical Cable vs. Comtech Telecommunications Corp | Optical Cable vs. Lantronix |
| Infinera vs. Juniper Networks | Infinera vs. Lumentum Holdings | Infinera vs. Extreme Networks | Infinera vs. Clearfield |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |