Correlation Between Ceragon Networks and Akoustis Technologies
Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and Akoustis Technologies 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 Akoustis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and Akoustis Technologies, you can compare the effects of market volatilities on Ceragon Networks and Akoustis Technologies 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 Akoustis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and Akoustis Technologies.
Diversification Opportunities for Ceragon Networks and Akoustis Technologies
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ceragon and Akoustis is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Akoustis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akoustis Technologies 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 Akoustis Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akoustis Technologies has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Akoustis Technologies go up and down completely randomly.
Pair Corralation between Ceragon Networks and Akoustis Technologies
Given the investment horizon of 90 days Ceragon Networks is expected to generate 0.3 times more return on investment than Akoustis Technologies. However, Ceragon Networks is 3.32 times less risky than Akoustis Technologies. It trades about 0.07 of its potential returns per unit of risk. Akoustis Technologies is currently generating about -0.04 per unit of risk. If you would invest 197.00 in Ceragon Networks on August 28, 2024 and sell it today you would earn a total of 209.00 from holding Ceragon Networks or generate 106.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceragon Networks vs. Akoustis Technologies
Performance |
| Timeline |
| Ceragon Networks |
| Akoustis Technologies |
Ceragon Networks and Akoustis Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceragon Networks and Akoustis Technologies
The main advantage of trading using opposite Ceragon Networks and Akoustis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, Akoustis Technologies 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 Akoustis Technologies will offset losses from the drop in Akoustis Technologies' long position.| Ceragon Networks vs. Cambium Networks Corp | Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Knowles Cor | Ceragon Networks vs. AudioCodes |
| Akoustis Technologies vs. Aviat Networks | Akoustis Technologies vs. AudioCodes | Akoustis Technologies vs. Silicom | Akoustis Technologies vs. Gilat Satellite Networks |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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