Correlation Between Ceragon Networks and Plug Power
Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and Plug Power 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 Plug Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and Plug Power, you can compare the effects of market volatilities on Ceragon Networks and Plug Power 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 Plug Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and Plug Power.
Diversification Opportunities for Ceragon Networks and Plug Power
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ceragon and Plug is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Plug Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plug Power 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 Plug Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plug Power has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Plug Power go up and down completely randomly.
Pair Corralation between Ceragon Networks and Plug Power
Given the investment horizon of 90 days Ceragon Networks is expected to generate 0.94 times more return on investment than Plug Power. However, Ceragon Networks is 1.06 times less risky than Plug Power. It trades about 0.51 of its potential returns per unit of risk. Plug Power is currently generating about 0.17 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 238.00 from holding Ceragon Networks or generate 94.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ceragon Networks vs. Plug Power
Performance |
| Timeline |
| Ceragon Networks |
| Plug Power |
Ceragon Networks and Plug Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceragon Networks and Plug Power
The main advantage of trading using opposite Ceragon Networks and Plug Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, Plug Power 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 Plug Power will offset losses from the drop in Plug Power's long position.| Ceragon Networks vs. Cambium Networks Corp | Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Knowles Cor | Ceragon Networks vs. AudioCodes |
| Plug Power vs. Hilton Food Group | Plug Power vs. Roebuck Food Group | Plug Power vs. GoldMining | Plug Power vs. Cornish Metals |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |