Correlation Between Ciena Corp and ViaSat
Can any of the company-specific risk be diversified away by investing in both Ciena Corp and ViaSat 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 ViaSat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ciena Corp and ViaSat Inc, you can compare the effects of market volatilities on Ciena Corp and ViaSat 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 ViaSat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ciena Corp and ViaSat.
Diversification Opportunities for Ciena Corp and ViaSat
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ciena and ViaSat is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ciena Corp and ViaSat Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ViaSat Inc 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 ViaSat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ViaSat Inc has no effect on the direction of Ciena Corp i.e., Ciena Corp and ViaSat go up and down completely randomly.
Pair Corralation between Ciena Corp and ViaSat
Given the investment horizon of 90 days Ciena Corp is expected to under-perform the ViaSat. But the stock apears to be less risky and, when comparing its historical volatility, Ciena Corp is 2.17 times less risky than ViaSat. The stock trades about -0.43 of its potential returns per unit of risk. The ViaSat Inc is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 1,773 in ViaSat Inc on January 20, 2024 and sell it today you would lose (220.00) from holding ViaSat Inc or give up 12.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ciena Corp vs. ViaSat Inc
Performance |
| Timeline |
| Ciena Corp |
| ViaSat Inc |
Ciena Corp and ViaSat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ciena Corp and ViaSat
The main advantage of trading using opposite Ciena Corp and ViaSat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ciena Corp position performs unexpectedly, ViaSat 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 ViaSat will offset losses from the drop in ViaSat's long position.| Ciena Corp vs. Extreme Networks | Ciena Corp vs. Hewlett Packard Enterprise | Ciena Corp vs. NETGEAR | Ciena Corp vs. Motorola Solutions |
| ViaSat vs. Comtech Telecommunications Corp | ViaSat vs. NETGEAR | ViaSat vs. KVH Industries | ViaSat vs. Silicom |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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