Correlation Between Ceragon Networks and EchoStar
Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and EchoStar 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 EchoStar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and EchoStar, you can compare the effects of market volatilities on Ceragon Networks and EchoStar 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 EchoStar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and EchoStar.
Diversification Opportunities for Ceragon Networks and EchoStar
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ceragon and EchoStar is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and EchoStar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EchoStar 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 EchoStar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EchoStar has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and EchoStar go up and down completely randomly.
Pair Corralation between Ceragon Networks and EchoStar
Given the investment horizon of 90 days Ceragon Networks is expected to generate 1.14 times more return on investment than EchoStar. However, Ceragon Networks is 1.14 times more volatile than EchoStar. It trades about 0.43 of its potential returns per unit of risk. EchoStar is currently generating about -0.01 per unit of risk. If you would invest 258.00 in Ceragon Networks on August 28, 2024 and sell it today you would earn a total of 148.00 from holding Ceragon Networks or generate 57.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceragon Networks vs. EchoStar
Performance |
| Timeline |
| Ceragon Networks |
| EchoStar |
Ceragon Networks and EchoStar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceragon Networks and EchoStar
The main advantage of trading using opposite Ceragon Networks and EchoStar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, EchoStar 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 EchoStar will offset losses from the drop in EchoStar's long position.| Ceragon Networks vs. Cambium Networks Corp | Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Knowles Cor | Ceragon Networks vs. AudioCodes |
| EchoStar vs. ADTRAN Inc | EchoStar vs. Mynaric AG ADR | EchoStar vs. KVH Industries | EchoStar vs. Telesat Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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