Correlation Between Ceragon Networks and USS Co
Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and USS Co 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 USS Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and USS Co Ltd, you can compare the effects of market volatilities on Ceragon Networks and USS Co 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 USS Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and USS Co.
Diversification Opportunities for Ceragon Networks and USS Co
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ceragon and USS is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and USS Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USS Co 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 USS Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USS Co has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and USS Co go up and down completely randomly.
Pair Corralation between Ceragon Networks and USS Co
Given the investment horizon of 90 days Ceragon Networks is expected to generate 1.36 times more return on investment than USS Co. However, Ceragon Networks is 1.36 times more volatile than USS Co Ltd. It trades about 0.12 of its potential returns per unit of risk. USS Co Ltd is currently generating about 0.02 per unit of risk. If you would invest 199.00 in Ceragon Networks on September 12, 2024 and sell it today you would earn a total of 251.00 from holding Ceragon Networks or generate 126.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Ceragon Networks vs. USS Co Ltd
Performance |
| Timeline |
| Ceragon Networks |
| USS Co |
Ceragon Networks and USS Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceragon Networks and USS Co
The main advantage of trading using opposite Ceragon Networks and USS Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, USS Co 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 USS Co will offset losses from the drop in USS Co's long position.| Ceragon Networks vs. Cambium Networks Corp | Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Knowles Cor | Ceragon Networks vs. AudioCodes |
| USS Co vs. Sonic Automotive | USS Co vs. Lithia Motors | USS Co vs. AutoNation | USS Co vs. Asbury Automotive Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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