Correlation Between Ciena Corp and Lufax Holding

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

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

Diversification Opportunities for Ciena Corp and Lufax Holding

0.15

Correlation Coefficient

Ciena Corp  Lufax Holding

Average diversification

The 3 months correlation between Ciena and Lufax is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ciena Corp and Lufax Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lufax Holding 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 Lufax Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lufax Holding has no effect on the direction of Ciena Corp i.e., Ciena Corp and Lufax Holding go up and down completely randomly.

Pair Corralation between Ciena Corp and Lufax Holding

Given the investment horizon of 90 days Ciena Corp is expected to generate 0.81 times more return on investment than Lufax Holding. However, Ciena Corp is 1.23 times less risky than Lufax Holding. It trades about 0.14 of its potential returns per unit of risk. Lufax Holding is currently generating about 0.0 per unit of risk. If you would invest  7,266  in Ciena Corp on May 6, 2025 and sell it today you would earn a total of  1,597  from holding Ciena Corp or generate 21.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ciena Corp  vs.  Lufax Holding

Ciena Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ciena Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Ciena Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

Lufax Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lufax Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Lufax Holding is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ciena Corp and Lufax Holding

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

The idea behind Ciena Corp and Lufax Holding 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.