Correlation Between Microwave Filter and Ciena Corp

Can any of the company-specific risk be diversified away by investing in both Microwave Filter and Ciena Corp 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 Microwave Filter and Ciena Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Microwave Filter and Ciena Corp, you can compare the effects of market volatilities on Microwave Filter and Ciena Corp 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 Microwave Filter with a short position of Ciena Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microwave Filter and Ciena Corp.

Diversification Opportunities for Microwave Filter and Ciena Corp

0.0

Correlation Coefficient

Microwave Filter  Ciena Corp

Pay attention - limited upside

The 3 months correlation between Microwave and Ciena is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Microwave Filter and Ciena Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ciena Corp and Microwave Filter 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 Microwave Filter are associated (or correlated) with Ciena Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ciena Corp has no effect on the direction of Microwave Filter i.e., Microwave Filter and Ciena Corp go up and down completely randomly.

Pair Corralation between Microwave Filter and Ciena Corp

If you would invest (100.00) in Microwave Filter on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Microwave Filter or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Microwave Filter  vs.  Ciena Corp

Microwave Filter

Risk-Adjusted Performance

Very Weak

Over the last 90 days Microwave Filter has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Microwave Filter is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Ciena Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ciena Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Microwave Filter and Ciena Corp

The main advantage of trading using opposite Microwave Filter and Ciena Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microwave Filter position performs unexpectedly, Ciena Corp 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 Ciena Corp will offset losses from the drop in Ciena Corp's long position.

The idea behind Microwave Filter and Ciena Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.