Correlation Between Applied Opt and Clearfield
Can any of the company-specific risk be diversified away by investing in both Applied Opt and Clearfield 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 Applied Opt and Clearfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Opt and Clearfield, you can compare the effects of market volatilities on Applied Opt and Clearfield 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 Applied Opt with a short position of Clearfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Opt and Clearfield.
Diversification Opportunities for Applied Opt and Clearfield
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Applied and Clearfield is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Applied Opt and Clearfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearfield and Applied Opt 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 Applied Opt are associated (or correlated) with Clearfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearfield has no effect on the direction of Applied Opt i.e., Applied Opt and Clearfield go up and down completely randomly.
Pair Corralation between Applied Opt and Clearfield
Given the investment horizon of 90 days Applied Opt is expected to under-perform the Clearfield. In addition to that, Applied Opt is 2.23 times more volatile than Clearfield. It trades about -0.15 of its total potential returns per unit of risk. Clearfield is currently generating about 0.05 per unit of volatility. If you would invest 3,100 in Clearfield on December 1, 2024 and sell it today you would earn a total of 141.00 from holding Clearfield or generate 4.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Applied Opt vs. Clearfield
Performance |
Timeline |
Applied Opt |
Clearfield |
Applied Opt and Clearfield Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Applied Opt and Clearfield
The main advantage of trading using opposite Applied Opt and Clearfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Opt position performs unexpectedly, Clearfield 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 Clearfield will offset losses from the drop in Clearfield's long position.Applied Opt vs. Lumentum Holdings | Applied Opt vs. Ichor Holdings | Applied Opt vs. Fabrinet | Applied Opt vs. Hello Group |
Clearfield vs. Comtech Telecommunications Corp | Clearfield vs. Knowles Cor | Clearfield vs. Extreme Networks | Clearfield vs. KVH Industries |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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