Correlation Between Calix and Cambium Networks
Can any of the company-specific risk be diversified away by investing in both Calix and Cambium Networks 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 Calix and Cambium Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calix Inc and Cambium Networks Corp, you can compare the effects of market volatilities on Calix and Cambium Networks 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 Calix with a short position of Cambium Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calix and Cambium Networks.
Diversification Opportunities for Calix and Cambium Networks
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Calix and Cambium is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Calix Inc and Cambium Networks Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambium Networks Corp and Calix 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 Calix Inc are associated (or correlated) with Cambium Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambium Networks Corp has no effect on the direction of Calix i.e., Calix and Cambium Networks go up and down completely randomly.
Pair Corralation between Calix and Cambium Networks
Given the investment horizon of 90 days Calix is expected to generate 4.29 times less return on investment than Cambium Networks. But when comparing it to its historical volatility, Calix Inc is 3.71 times less risky than Cambium Networks. It trades about 0.2 of its potential returns per unit of risk. Cambium Networks Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 74.00 in Cambium Networks Corp on October 20, 2024 and sell it today you would earn a total of 29.00 from holding Cambium Networks Corp or generate 39.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calix Inc vs. Cambium Networks Corp
Performance |
| Timeline |
| Calix Inc |
| Cambium Networks Corp |
Calix and Cambium Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calix and Cambium Networks
The main advantage of trading using opposite Calix and Cambium Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calix position performs unexpectedly, Cambium Networks 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 Cambium Networks will offset losses from the drop in Cambium Networks' long position.The idea behind Calix Inc and Cambium Networks 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.| Cambium Networks vs. Aviat Networks | Cambium Networks vs. Rimini Street | Cambium Networks vs. Airgain | Cambium Networks vs. Calix Inc |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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