Correlation Between Ceragon Networks and Aura Energy
Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and Aura Energy 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 Aura Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and Aura Energy Limited, you can compare the effects of market volatilities on Ceragon Networks and Aura Energy 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 Aura Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and Aura Energy.
Diversification Opportunities for Ceragon Networks and Aura Energy
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ceragon and Aura is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Aura Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura Energy Limited 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 Aura Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aura Energy Limited has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Aura Energy go up and down completely randomly.
Pair Corralation between Ceragon Networks and Aura Energy
Given the investment horizon of 90 days Ceragon Networks is expected to generate 2.04 times less return on investment than Aura Energy. But when comparing it to its historical volatility, Ceragon Networks is 3.67 times less risky than Aura Energy. It trades about 0.17 of its potential returns per unit of risk. Aura Energy Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Aura Energy Limited on August 29, 2024 and sell it today you would earn a total of 3.00 from holding Aura Energy Limited or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Ceragon Networks vs. Aura Energy Limited
Performance |
| Timeline |
| Ceragon Networks |
| Aura Energy Limited |
Ceragon Networks and Aura Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceragon Networks and Aura Energy
The main advantage of trading using opposite Ceragon Networks and Aura Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, Aura Energy 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 Aura Energy will offset losses from the drop in Aura Energy's long position.| Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Merck Company | Ceragon Networks vs. Pharvaris BV | Ceragon Networks vs. Brinker International |
| Aura Energy vs. Elevate Uranium | Aura Energy vs. Baselode Energy Corp | Aura Energy vs. Peninsula Energy | Aura Energy vs. Forsys Metals Corp |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |