Correlation Between Ceragon Networks and Genus Plc
Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and Genus Plc 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 Genus Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and Genus plc, you can compare the effects of market volatilities on Ceragon Networks and Genus Plc 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 Genus Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and Genus Plc.
Diversification Opportunities for Ceragon Networks and Genus Plc
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ceragon and Genus is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Genus plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genus plc 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 Genus Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genus plc has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Genus Plc go up and down completely randomly.
Pair Corralation between Ceragon Networks and Genus Plc
Given the investment horizon of 90 days Ceragon Networks is expected to generate 2.4 times more return on investment than Genus Plc. However, Ceragon Networks is 2.4 times more volatile than Genus plc. It trades about 0.5 of its potential returns per unit of risk. Genus plc is currently generating about -0.21 per unit of risk. If you would invest 242.00 in Ceragon Networks on September 5, 2024 and sell it today you would earn a total of 197.00 from holding Ceragon Networks or generate 81.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceragon Networks vs. Genus plc
Performance |
| Timeline |
| Ceragon Networks |
| Genus plc |
Ceragon Networks and Genus Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceragon Networks and Genus Plc
The main advantage of trading using opposite Ceragon Networks and Genus Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, Genus Plc 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 Genus Plc will offset losses from the drop in Genus Plc's long position.| Ceragon Networks vs. Cambium Networks Corp | Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Knowles Cor | Ceragon Networks vs. AudioCodes |
| Genus Plc vs. Cardinal Health | Genus Plc vs. Verra Mobility Corp | Genus Plc vs. Old Dominion Freight | Genus Plc vs. TFI International |
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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