Correlation Between Ceragon Networks and Soma Gold
Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and Soma Gold 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 Soma Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and Soma Gold Corp, you can compare the effects of market volatilities on Ceragon Networks and Soma Gold 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 Soma Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and Soma Gold.
Diversification Opportunities for Ceragon Networks and Soma Gold
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ceragon and Soma is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Soma Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soma Gold Corp 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 Soma Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soma Gold Corp has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Soma Gold go up and down completely randomly.
Pair Corralation between Ceragon Networks and Soma Gold
Given the investment horizon of 90 days Ceragon Networks is expected to generate 1.14 times less return on investment than Soma Gold. But when comparing it to its historical volatility, Ceragon Networks is 1.43 times less risky than Soma Gold. It trades about 0.07 of its potential returns per unit of risk. Soma Gold Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Soma Gold Corp on September 3, 2024 and sell it today you would earn a total of 22.00 from holding Soma Gold Corp or generate 110.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ceragon Networks vs. Soma Gold Corp
Performance |
| Timeline |
| Ceragon Networks |
| Soma Gold Corp |
Ceragon Networks and Soma Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceragon Networks and Soma Gold
The main advantage of trading using opposite Ceragon Networks and Soma Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, Soma Gold 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 Soma Gold will offset losses from the drop in Soma Gold's long position.| Ceragon Networks vs. Cambium Networks Corp | Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Knowles Cor | Ceragon Networks vs. AudioCodes |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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