Correlation Between Ceragon Networks and Vinci SA

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Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and Vinci SA 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 Ceragon Networks and Vinci SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and Vinci SA, you can compare the effects of market volatilities on Ceragon Networks and Vinci SA 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 Ceragon Networks with a short position of Vinci SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and Vinci SA.

Diversification Opportunities for Ceragon Networks and Vinci SA

-0.53
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Ceragon and Vinci is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Vinci SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci SA and Ceragon Networks 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 Ceragon Networks are associated (or correlated) with Vinci SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci SA has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Vinci SA go up and down completely randomly.

Pair Corralation between Ceragon Networks and Vinci SA

Given the investment horizon of 90 days Ceragon Networks is expected to generate 5.07 times more return on investment than Vinci SA. However, Ceragon Networks is 5.07 times more volatile than Vinci SA. It trades about 0.45 of its potential returns per unit of risk. Vinci SA is currently generating about -0.01 per unit of risk. If you would invest  253.00  in Ceragon Networks on September 12, 2024 and sell it today you would earn a total of  197.00  from holding Ceragon Networks or generate 77.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.65%
ValuesDaily Returns

Ceragon Networks  vs.  Vinci SA

 Performance 
       Timeline  
Ceragon Networks 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Ceragon Networks are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Ceragon Networks unveiled solid returns over the last few months and may actually be approaching a breakup point.
Vinci SA 

Risk-Adjusted Performance

0 of 100

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

Ceragon Networks and Vinci SA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ceragon Networks and Vinci SA

The main advantage of trading using opposite Ceragon Networks and Vinci SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, Vinci SA 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 Vinci SA will offset losses from the drop in Vinci SA's long position.
The idea behind Ceragon Networks and Vinci SA 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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