Correlation Between Clearfield and EMCORE
Can any of the company-specific risk be diversified away by investing in both Clearfield and EMCORE 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 EMCORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearfield and EMCORE, you can compare the effects of market volatilities on Clearfield and EMCORE 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 EMCORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearfield and EMCORE.
Diversification Opportunities for Clearfield and EMCORE
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Clearfield and EMCORE is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Clearfield and EMCORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCORE 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 EMCORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCORE has no effect on the direction of Clearfield i.e., Clearfield and EMCORE go up and down completely randomly.
Pair Corralation between Clearfield and EMCORE
Given the investment horizon of 90 days Clearfield is expected to generate 0.25 times more return on investment than EMCORE. However, Clearfield is 3.93 times less risky than EMCORE. It trades about 0.31 of its potential returns per unit of risk. EMCORE is currently generating about -0.26 per unit of risk. If you would invest 2,990 in Clearfield on February 27, 2024 and sell it today you would earn a total of 719.00 from holding Clearfield or generate 24.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Clearfield vs. EMCORE
Performance |
Timeline |
Clearfield |
EMCORE |
Clearfield and EMCORE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Clearfield and EMCORE
The main advantage of trading using opposite Clearfield and EMCORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearfield position performs unexpectedly, EMCORE 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 EMCORE will offset losses from the drop in EMCORE's long position.Clearfield vs. Hewlett Packard Enterprise | Clearfield vs. Juniper Networks | Clearfield vs. Cisco Systems | Clearfield vs. Extreme Networks |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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