Correlation Between Ceragon Networks and Emperador
Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and Emperador 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 Emperador into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and Emperador, you can compare the effects of market volatilities on Ceragon Networks and Emperador 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 Emperador. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and Emperador.
Diversification Opportunities for Ceragon Networks and Emperador
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ceragon and Emperador is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Emperador in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emperador 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 Emperador. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emperador has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Emperador go up and down completely randomly.
Pair Corralation between Ceragon Networks and Emperador
Given the investment horizon of 90 days Ceragon Networks is expected to generate 21.58 times more return on investment than Emperador. However, Ceragon Networks is 21.58 times more volatile than Emperador. It trades about 0.51 of its potential returns per unit of risk. Emperador is currently generating about -0.15 per unit of risk. If you would invest 256.00 in Ceragon Networks on September 13, 2024 and sell it today you would earn a total of 235.00 from holding Ceragon Networks or generate 91.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ceragon Networks vs. Emperador
Performance |
| Timeline |
| Ceragon Networks |
| Emperador |
Ceragon Networks and Emperador Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceragon Networks and Emperador
The main advantage of trading using opposite Ceragon Networks and Emperador positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, Emperador 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 Emperador will offset losses from the drop in Emperador's long position.| Ceragon Networks vs. Cambium Networks Corp | Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Knowles Cor | Ceragon Networks vs. AudioCodes |
| Emperador vs. SM Investments Corp | Emperador vs. San Miguel Pure | Emperador vs. Ayala Corp | Emperador vs. Ayala Land |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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