Correlation Between Nokia Corp and Ciena Corp
Can any of the company-specific risk be diversified away by investing in both Nokia Corp 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 Nokia Corp and Ciena Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nokia Corp ADR and Ciena Corp, you can compare the effects of market volatilities on Nokia Corp 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 Nokia Corp with a short position of Ciena Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Corp and Ciena Corp.
Diversification Opportunities for Nokia Corp and Ciena Corp
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nokia and Ciena is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Corp ADR and Ciena Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ciena Corp and Nokia 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 Nokia Corp ADR 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 Nokia Corp i.e., Nokia Corp and Ciena Corp go up and down completely randomly.
Pair Corralation between Nokia Corp and Ciena Corp
Considering the 90-day investment horizon Nokia Corp ADR is expected to under-perform the Ciena Corp. But the stock apears to be less risky and, when comparing its historical volatility, Nokia Corp ADR is 1.49 times less risky than Ciena Corp. The stock trades about -0.18 of its potential returns per unit of risk. The Ciena Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 20,952 in Ciena Corp on September 13, 2025 and sell it today you would earn a total of 1,233 from holding Ciena Corp or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nokia Corp ADR vs. Ciena Corp
Performance |
| Timeline |
| Nokia Corp ADR |
| Ciena Corp |
Nokia Corp and Ciena Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia Corp and Ciena Corp
The main advantage of trading using opposite Nokia Corp and Ciena Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Corp 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.| Nokia Corp vs. Telefonaktiebolaget LM Ericsson | Nokia Corp vs. Hewlett Packard Enterprise | Nokia Corp vs. Celestica | Nokia Corp vs. Ubiquiti Networks |
| Ciena Corp vs. Credo Technology Group | Ciena Corp vs. Hewlett Packard Enterprise | Ciena Corp vs. Wipro Limited ADR | Ciena Corp vs. EchoStar |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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