Correlation Between Ceragon Networks and MRG Metals
Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and MRG Metals 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 MRG Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and MRG Metals, you can compare the effects of market volatilities on Ceragon Networks and MRG Metals 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 MRG Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and MRG Metals.
Diversification Opportunities for Ceragon Networks and MRG Metals
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ceragon and MRG is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and MRG Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRG Metals 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 MRG Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MRG Metals has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and MRG Metals go up and down completely randomly.
Pair Corralation between Ceragon Networks and MRG Metals
Given the investment horizon of 90 days Ceragon Networks is expected to generate 5.37 times less return on investment than MRG Metals. But when comparing it to its historical volatility, Ceragon Networks is 5.74 times less risky than MRG Metals. It trades about 0.07 of its potential returns per unit of risk. MRG Metals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.40 in MRG Metals on September 3, 2024 and sell it today you would lose (0.10) from holding MRG Metals or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Ceragon Networks vs. MRG Metals
Performance |
| Timeline |
| Ceragon Networks |
| MRG Metals |
Ceragon Networks and MRG Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceragon Networks and MRG Metals
The main advantage of trading using opposite Ceragon Networks and MRG Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, MRG Metals 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 MRG Metals will offset losses from the drop in MRG Metals' long position.| Ceragon Networks vs. Cambium Networks Corp | Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Knowles Cor | Ceragon Networks vs. AudioCodes |
| MRG Metals vs. Northern Star Resources | MRG Metals vs. Evolution Mining | MRG Metals vs. Bluescope Steel | MRG Metals vs. Aneka Tambang Tbk |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |