Correlation Between Ceragon Networks and Bin Chuan
Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and Bin Chuan 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 Bin Chuan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and Bin Chuan Enterprise, you can compare the effects of market volatilities on Ceragon Networks and Bin Chuan 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 Bin Chuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and Bin Chuan.
Diversification Opportunities for Ceragon Networks and Bin Chuan
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ceragon and Bin is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Bin Chuan Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bin Chuan Enterprise 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 Bin Chuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bin Chuan Enterprise has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Bin Chuan go up and down completely randomly.
Pair Corralation between Ceragon Networks and Bin Chuan
Given the investment horizon of 90 days Ceragon Networks is expected to generate 1.42 times more return on investment than Bin Chuan. However, Ceragon Networks is 1.42 times more volatile than Bin Chuan Enterprise. It trades about 0.47 of its potential returns per unit of risk. Bin Chuan Enterprise is currently generating about 0.57 per unit of risk. If you would invest 242.00 in Ceragon Networks on September 4, 2024 and sell it today you would earn a total of 174.00 from holding Ceragon Networks or generate 71.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ceragon Networks vs. Bin Chuan Enterprise
Performance |
| Timeline |
| Ceragon Networks |
| Bin Chuan Enterprise |
Ceragon Networks and Bin Chuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceragon Networks and Bin Chuan
The main advantage of trading using opposite Ceragon Networks and Bin Chuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, Bin Chuan 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 Bin Chuan will offset losses from the drop in Bin Chuan's long position.| Ceragon Networks vs. Cambium Networks Corp | Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Knowles Cor | Ceragon Networks vs. AudioCodes |
| Bin Chuan vs. Holtek Semiconductor | Bin Chuan vs. Orient Semiconductor Electronics | Bin Chuan vs. Davicom Semiconductor | Bin Chuan vs. Taiwan Semiconductor Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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