Correlation Between Ceragon Networks and Ferronordic
Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and Ferronordic 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 Ferronordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and Ferronordic AB, you can compare the effects of market volatilities on Ceragon Networks and Ferronordic 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 Ferronordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and Ferronordic.
Diversification Opportunities for Ceragon Networks and Ferronordic
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ceragon and Ferronordic is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Ferronordic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferronordic AB 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 Ferronordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferronordic AB has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Ferronordic go up and down completely randomly.
Pair Corralation between Ceragon Networks and Ferronordic
Given the investment horizon of 90 days Ceragon Networks is expected to generate 2.41 times more return on investment than Ferronordic. However, Ceragon Networks is 2.41 times more volatile than Ferronordic AB. It trades about 0.2 of its potential returns per unit of risk. Ferronordic AB is currently generating about -0.03 per unit of risk. If you would invest 276.00 in Ceragon Networks on September 12, 2024 and sell it today you would earn a total of 174.00 from holding Ceragon Networks or generate 63.04% 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. Ferronordic AB
Performance |
| Timeline |
| Ceragon Networks |
| Ferronordic AB |
Ceragon Networks and Ferronordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceragon Networks and Ferronordic
The main advantage of trading using opposite Ceragon Networks and Ferronordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, Ferronordic 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 Ferronordic will offset losses from the drop in Ferronordic's long position.| Ceragon Networks vs. Cambium Networks Corp | Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Knowles Cor | Ceragon Networks vs. AudioCodes |
| Ferronordic vs. 24SevenOffice Scandinavia AB | Ferronordic vs. High Coast Distillery | Ferronordic vs. Nexam Chemical Holding | Ferronordic vs. Nitro Games Oyj |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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