Correlation Between Ciena Corp and Amplitech
Can any of the company-specific risk be diversified away by investing in both Ciena Corp and Amplitech 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 Amplitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ciena Corp and Amplitech Group, you can compare the effects of market volatilities on Ciena Corp and Amplitech 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 Amplitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ciena Corp and Amplitech.
Diversification Opportunities for Ciena Corp and Amplitech
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ciena and Amplitech is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ciena Corp and Amplitech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplitech Group 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 Amplitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplitech Group has no effect on the direction of Ciena Corp i.e., Ciena Corp and Amplitech go up and down completely randomly.
Pair Corralation between Ciena Corp and Amplitech
Given the investment horizon of 90 days Ciena Corp is expected to generate 0.58 times more return on investment than Amplitech. However, Ciena Corp is 1.73 times less risky than Amplitech. It trades about 0.02 of its potential returns per unit of risk. Amplitech Group is currently generating about -0.1 per unit of risk. If you would invest 4,750 in Ciena Corp on February 7, 2024 and sell it today you would earn a total of 27.00 from holding Ciena Corp or generate 0.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ciena Corp vs. Amplitech Group
Performance |
Timeline |
Ciena Corp |
Amplitech Group |
Ciena Corp and Amplitech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ciena Corp and Amplitech
The main advantage of trading using opposite Ciena Corp and Amplitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ciena Corp position performs unexpectedly, Amplitech 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 Amplitech will offset losses from the drop in Amplitech's long position.Ciena Corp vs. Civeo Corp | Ciena Corp vs. BrightView Holdings | Ciena Corp vs. Maximus | Ciena Corp vs. CBIZ Inc |
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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 Stocks Directory module to find actively traded stocks across global markets.
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