Correlation Between Ceragon Networks and Prairie Provident
Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and Prairie Provident 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 Prairie Provident into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and Prairie Provident Resources, you can compare the effects of market volatilities on Ceragon Networks and Prairie Provident 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 Prairie Provident. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and Prairie Provident.
Diversification Opportunities for Ceragon Networks and Prairie Provident
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ceragon and Prairie is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Prairie Provident Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prairie Provident 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 Prairie Provident. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prairie Provident has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Prairie Provident go up and down completely randomly.
Pair Corralation between Ceragon Networks and Prairie Provident
Given the investment horizon of 90 days Ceragon Networks is expected to generate 0.48 times more return on investment than Prairie Provident. However, Ceragon Networks is 2.07 times less risky than Prairie Provident. It trades about 0.5 of its potential returns per unit of risk. Prairie Provident Resources is currently generating about 0.18 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceragon Networks vs. Prairie Provident Resources
Performance |
| Timeline |
| Ceragon Networks |
| Prairie Provident |
Ceragon Networks and Prairie Provident Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceragon Networks and Prairie Provident
The main advantage of trading using opposite Ceragon Networks and Prairie Provident positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, Prairie Provident 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 Prairie Provident will offset losses from the drop in Prairie Provident's long position.| Ceragon Networks vs. Cambium Networks Corp | Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Knowles Cor | Ceragon Networks vs. AudioCodes |
| Prairie Provident vs. Pine Cliff Energy | Prairie Provident vs. InPlay Oil Corp | Prairie Provident vs. Journey Energy |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |