AAOI vs CIEN: Stock Returns, Risk & Volatility (2026)

Q: Which is a better investment: AAOI or CIEN?

Over the past year, it depends: AAOI led on total return (AAOI +1238.7% vs CIEN +747.9%), but CIEN had the higher Sharpe ratio (CIEN 3.74 vs AAOI 2.58). On risk, CIEN was less volatile (CIEN 62.3% vs AAOI 132.9%), CIEN had a smaller max drawdown (CIEN -16.8% vs AAOI -47.6%), and CIEN had less severe losses on the worst 5% of days (Expected Shortfall of CIEN -9.32% vs AAOI -14.38%).

Written by Gale Finance Team

Reviewed by Sid Kalla CFA Charterholder

Quick answer

Which is a better investment: AAOI or CIEN?

Over the past year, results are mixed (+1238.7% vs +747.9%).

Total Return

AAOI WIN +1238.7%

CIEN +747.9%

Sharpe Ratio

AAOI 2.58

CIEN WIN 3.74

Annualized Volatility

AAOI 132.9%

CIEN WIN 62.3%

Max Drawdown

AAOI -47.6%

CIEN WIN -16.8%

Analysis period: 2025-04-14 to 2026-04-10

AAOI Total Return

↑ +1238.7%

CIEN Total Return

↑ +747.9%

Relative Performance of AAOI vs CIEN (Normalized to 100)

AAOI CIEN

Normalized to 100 at start date for comparison

Key Takeaways

Total Return: AAOI delivered a +1238.7% total return, while CIEN returned +747.9% over the same period. AAOI outperformed on total returns.
Risk-Adjusted Return (Sharpe Ratio): CIEN had a higher Sharpe (3.74 vs 2.58), indicating better risk-adjusted performance.
Volatility (Annualized): AAOI was more volatile, with 132.9% annualized volatility, versus 62.3% for CIEN.
Maximum Drawdown: CIEN's maximum drawdown was -16.8%, while AAOI experienced a deeper drawdown of -47.6%.
Tail Risk (VaR & Expected Shortfall): At the 5% level (daily log returns), AAOI's VaR was -11.68% and its Expected Shortfall (CVaR) was -14.38%; CIEN's were -4.80% and -9.32%. VaR is the cutoff; Expected Shortfall is the average move on the worst days.
Skew & Kurtosis: Skew: AAOI 0.82 vs CIEN -0.27. Excess kurtosis: AAOI 3.38 vs CIEN 4.84. Negative skew leans downside; higher excess kurtosis means fatter tails.
Tail Days & Extremes: 2σ tail days (down/up): AAOI 4/9, CIEN 9/6. Worst day: AAOI -16.39% (2026-03-12) vs CIEN -13.14% (2026-01-08). Best day: AAOI +56.88% (2026-02-27) vs CIEN +23.31% (2025-09-04).
Risk ratios: Sortino - AAOI: 4.97 vs. CIEN: 6.19 , Calmar - AAOI: 26.87 vs. CIEN: 45.70 , Sterling - AAOI: 60.34 vs. CIEN: 52.34 , Treynor - AAOI: 0.83 vs. CIEN: 0.99 , Ulcer Index - AAOI: 16.88% vs. CIEN: 5.54%

Applied Optoelectronics vs Ciena Correlation

0.52 Average Correlation

Applied Optoelectronics and Ciena are moderately correlated over the past year. With a correlation of 0.52, these assets show moderate co-movement, offering some diversification when held together.

For portfolio construction, this moderate correlation offers some diversification benefit, though the assets still tend to move together during major market moves.

Metric	Value
Current (30-day)	0.47
Average (full period)	0.52
Minimum	0.16
Maximum	0.83

Correlation measures how closely two assets move together. Values near +1 indicate strong co-movement, near 0 indicates independence, and negative values indicate inverse movement.

Investment Comparison

If you invested $10,000 in each asset on April 14, 2025:

AAOI $133,866.67 +1238.7%

CIEN $84,789.74 +747.9%

Difference: $49,076.93 (AAOI ahead)

Applied Optoelectronics and Ciena: Risk Analysis

Applied Optoelectronics experienced its maximum drawdown of -47.6% from 2025-10-27 to 2025-11-20. It took 32 days to recover.

Ciena experienced its maximum drawdown of -16.8% from 2026-03-02 to 2026-03-06. It took 10 days to recover.

Smaller drawdowns and faster recoveries indicate lower downside risk and greater resilience during market stress.

Sharpe Ratio of AAOI and CIEN

AAOI Sharpe Ratio

↑ 2.58

CIEN Sharpe Ratio

↑ 3.74

Sharpe ratio measures return per unit of risk (volatility). A higher Sharpe indicates better risk-adjusted performance. CIEN had a higher Sharpe (3.74 vs 2.58), indicating better risk-adjusted performance.

A Sharpe above 1.0 is generally considered good, above 2.0 is excellent. Negative Sharpe means the asset underperformed the risk-free rate. Calculated on each asset's full 365-day lookback of available prices and annualized using the asset calendar (365 for crypto, 252 trading days for equities/ETFs/metals).

Sortino Ratio of AAOI and CIEN

AAOI Sortino Ratio

↑ 4.97

CIEN Sortino Ratio

↑ 6.19

Sortino ratio measures return per unit of downside risk. Unlike Sharpe, it only counts downside deviation (returns below the target return). CIEN had better downside-adjusted returns.

A higher Sortino is better. It's useful when upside volatility is common (crypto is the obvious example). Downside deviation: AAOI 69.0% vs CIEN 37.7%. Calculated on each asset's full 365-day lookback of available prices, using the daily risk-free rate as the target return, and annualized using the asset calendar (365 for crypto, 252 trading days for equities/ETFs/metals).

Calmar Ratio of AAOI and CIEN

AAOI Calmar Ratio

↑ 26.87

CIEN Calmar Ratio

↑ 45.70

Calmar ratio compares CAGR to maximum drawdown. Higher Calmar means more return per unit of worst drawdown. CIEN posted the higher Calmar ratio.

Calmar is computed on each asset's full 365-day lookback and uses the max drawdown over that same window.

Sterling Ratio of AAOI and CIEN

AAOI Sterling Ratio

↑ 60.34

CIEN Sterling Ratio

↑ 52.34

Sterling ratio measures excess return per unit of average drawdown (typically drawdowns worse than 10%). AAOI posted the higher Sterling ratio.

Sterling uses average drawdown events deeper than 10% and subtracts the risk-free rate to report excess return.

Treynor Ratio of AAOI and CIEN

AAOI Treynor Ratio

↑ 0.83

CIEN Treynor Ratio

↑ 0.99

Treynor ratio measures excess return per unit of market risk (beta) instead of total volatility. CIEN posted the higher Treynor ratio.

Treynor uses beta vs the S&P 500 (SPY) on shared dates and the average 3-month Treasury rate as the risk-free rate.

Ulcer Index of AAOI and CIEN

AAOI Ulcer Index

16.88%

CIEN Ulcer Index

5.54%

Ulcer Index captures drawdown depth and duration. Lower Ulcer Index means less drawdown pain. CIEN had the lower Ulcer Index (less drawdown pain).

Ulcer Index is computed from each asset's drawdown series over the full lookback window.

Tail Risk & Distribution Shape (1-Year): Applied Optoelectronics vs. Ciena

This section looks at the shape of daily returns, not just the average. Tail stats are computed per asset on its own daily series (crypto includes weekends). We use daily log returns $\ln\left(\frac{P_t}{P_{t-1}}\right)$ so multi-day moves add cleanly.

Definitions: Value at Risk (VaR), Expected Shortfall, skew, kurtosis, and fat tails.

Metric (1-Year)	AAOI	CIEN
5% VaR (daily log return)	-11.68%	-4.80%
5% Expected Shortfall (CVaR)	-14.38% (worst 13 days)	-9.32% (worst 13 days)
Skew	0.82	-0.27
Excess kurtosis	3.38	4.84
2σ tail days (down / up)	4 / 9	9 / 6
Worst day	-16.39% (2026-03-12)	-13.14% (2026-01-08)
Best day	+56.88% (2026-02-27)	+23.31% (2025-09-04)

Downside co-moves (2σ) — 1-Year

Computed on shared dates only (n=248). A “2σ downside move” means a shared-close log return more than 2 standard deviations below that asset’s own mean on this shared-date series. Dates below show simple returns (%) for readability.

When CIEN has a big down day, AAOI also does

22.2%

2 / 9 days

When AAOI has a big down day, CIEN also does

50.0%

2 / 4 days

Show downside tail dates

Dates below are shared-date observations. The “Date” is the period end (close). Tail thresholds are computed on log returns, but the table shows simple returns (%) for readability. Returns are computed from the previous shared close to this one (for example, Friday → Monday includes weekend moves).

Days when both AAOI and CIEN had a big down day (2σ)

Date (interval)	AAOI	CIEN
2026-03-20	-14.11%	-6.95%
2026-03-26	-14.85%	-11.36%

Days when AAOI had a big down day

Date (interval)	AAOI	CIEN
2025-10-10	-16.13%	-4.69%
2026-03-12	-16.39%	-0.92%
2026-03-20	-14.11%	-6.95%
2026-03-26	-14.85%	-11.36%

Days when CIEN had a big down day

Date (interval)	AAOI	CIEN
2025-06-05	-4.97%	-12.92%
2025-11-13	-12.66%	-7.31%
2025-12-12	-11.73%	-9.87%
2026-01-08	-13.26%	-13.14%
2026-02-04	-13.49%	-8.32%
2026-03-05	+1.43%	-12.88%
2026-03-20	-14.11%	-6.95%
2026-03-26	-14.85%	-11.36%
2026-03-27 → 2026-03-30	-13.26%	-9.12%

Read this as “how ugly the ugly days get”, not as a precise forecast. One-year samples are small, so tail estimates are inherently noisy.

Applied Optoelectronics vs Ciena Volatility (AAOI vs CIEN)

AAOI Volatility

132.9%

±8.37% daily

CIEN Volatility

62.3%

±3.92% daily

Typical daily swing

AAOI

±8.37%

CIEN

±3.92%

Applied Optoelectronics's annualized volatility of 132.9% means it typically moves ±8.37% on any given day.

Ciena's annualized volatility of 62.3% means it typically moves ±3.92% on any given day.

AAOI's higher volatility means a wider path to returns — this can be attractive for tactical, shorter-term exposure, while CIEN's smoother profile may better suit long-term allocators seeking steadier growth.

For comparison, the S&P 500 typically has 15-18% annualized volatility, translating to roughly ±1% daily moves. Higher volatility means larger potential gains but also larger potential losses.

Applied Optoelectronics vs Ciena Performance Over Time

Metric	AAOI	CIEN
30 Days	18.6%	45.9%
90 Days	342.4%	115.1%
180 Days	454.7%	218.1%
1 Year	1238.7%	747.9%

Shorter time frames can show different leaders as market conditions change. Consider your investment horizon when comparing performance.

Full Comparison of Applied Optoelectronics vs. Ciena (1-Year)

Metric	AAOI	CIEN
Total Return	+1238.7%	+747.9%
Annualized Volatility	132.9%	62.3%
Sharpe Ratio	2.58	3.74
Sortino Ratio	4.97	6.19
Calmar Ratio	26.87	45.70
Sterling Ratio	60.34	52.34
Treynor Ratio	0.83	0.99
Ulcer Index	16.88%	5.54%
Max Drawdown	-47.6%	-16.8%
Avg Correlation to S&P 500	0.46	0.53
5% VaR (daily log return)	-11.68%	-4.80%
5% Expected Shortfall (CVaR)	-14.38%	-9.32%
Skew	0.82	-0.27
Excess kurtosis	3.38	4.84
2σ tail days (down / up)	4 / 9	9 / 6

Audit this calculation

Formulas, inputs, and conventions used to compute the metrics on this page.

Inputs & conventions

Shared window for pair metrics: 2025-04-14 → 2026-04-10 (last shared close).
Rolling correlation sample (shared closes): 219 rolling 30-day values (from 248 shared daily returns).
Annualization (days/year): AAOI: 252 days/year; CIEN: 252 days/year.
Risk-free rate: Uses the 3-month U.S. Treasury yield (FRED: DGS3MO), averaged over each asset’s window:

AAOI: 4.17% over 2025-04-14 → 2026-04-10.

CIEN: 4.17% over 2025-04-14 → 2026-04-10.
Volatility drag (rule of thumb): Estimated from annualized volatility (simple returns). For the log-return framing, see Log returns.

AAOI: ≈ -88.3%/yr

CIEN: ≈ -19.4%/yr
Data alignment: No forward fill. Correlation and tail co-moves are computed on shared closes only.
For cross-calendar pairs (e.g., crypto vs stocks), weekend/holiday moves roll into the next shared close.
Return conventions: Volatility/Sharpe/Sortino use simple daily returns. Tail-risk uses daily log returns for distribution stats (but tables show simple returns). Log returns.

Formulas

Daily simple return

r_t = \frac{P_t}{P_{t-1}} - 1

Volatility

\sigma_{ann} = \sigma(r_t)\sqrt{A}

Volatility drag (approx.)

\text{drag} \approx \tfrac{1}{2}\sigma_{ann}^2

Sharpe Ratio

S = \frac{A\,\bar{r} - r_f}{\sigma(r_t)\sqrt{A}}

Sortino Ratio

So = \frac{A\,\bar{r} - r_f}{\sqrt{\mathbb{E}[\min(0,\,r_t - r_f/A)^2]}\,\sqrt{A}}

Maximum Drawdown

MDD = \min_t\left(\frac{P_t}{\max_{s \le t} P_s} - 1\right)

Average Correlation

\rho = \frac{\operatorname{cov}(r^A,\,r^B)}{\sigma_A\,\sigma_B}

Log returns

\ell_t = \ln\left(\frac{P_t}{P_{t-1}}\right)

Notation

$P_t$: Price on day t.
$r_t$: Simple daily return.
$\ell_t$: Log daily return.
$\bar{r}$: Average daily return.
$\sigma(r_t)$: Standard deviation of daily returns.
$A$: Annualization factor (days/year).
$r_f$: Annual risk-free rate.

Applied Optoelectronics vs Ciena: Frequently Asked Questions

Which has higher volatility: AAOI or CIEN?

AAOI showed higher volatility at 132.9% annualized, compared to 62.3% for CIEN Over the past year. Higher volatility means larger price swings in both directions.

Does AAOI provide diversification when held with CIEN?

AAOI and CIEN are moderately correlated over the past year, with an average correlation of 0.52. This offers some diversification benefit, though they still tend to move together during major market moves.

How bad are the worst 5% days for AAOI vs CIEN?

Over the past year, AAOI's 5% VaR was -11.68% and its 5% Expected Shortfall was -14.38% (worst 13 days). CIEN's were -4.80% and -9.32% (worst 13 days).

Do AAOI and CIEN crash together on bad days?

On shared dates (n=248), when CIEN has a 2σ down day, AAOI also does 22.2% (2/9 days). In the other direction, when AAOI has one, CIEN also does 50.0% (2/4 days).

Which has better risk-adjusted returns: AAOI or CIEN?

CIEN showed better risk-adjusted performance with a Sharpe ratio of 3.74 versus AAOI's 2.58 Over the past year.

Can AAOI and CIEN be combined in a portfolio?

Yes, though allocation sizing matters. Their moderate correlation offers some diversification benefits. AAOI's higher volatility (132.9%) means even small allocations can materially impact overall portfolio risk.

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