Correlation Between Ceragon Networks and WHA Public

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Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and WHA Public 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 WHA Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and WHA Public, you can compare the effects of market volatilities on Ceragon Networks and WHA Public 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 WHA Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and WHA Public.

Diversification Opportunities for Ceragon Networks and WHA Public

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Ceragon and WHA is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and WHA Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHA Public 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 WHA Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHA Public has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and WHA Public go up and down completely randomly.

Pair Corralation between Ceragon Networks and WHA Public

Given the investment horizon of 90 days Ceragon Networks is expected to generate 17.86 times less return on investment than WHA Public. But when comparing it to its historical volatility, Ceragon Networks is 22.06 times less risky than WHA Public. It trades about 0.07 of its potential returns per unit of risk. WHA Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  386.00  in WHA Public on September 12, 2024 and sell it today you would earn a total of  189.00  from holding WHA Public or generate 48.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy97.17%
ValuesDaily Returns

Ceragon Networks  vs.  WHA Public

 Performance 
       Timeline  
Ceragon Networks 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Ceragon Networks are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Ceragon Networks unveiled solid returns over the last few months and may actually be approaching a breakup point.
WHA Public 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in WHA Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, WHA Public sustained solid returns over the last few months and may actually be approaching a breakup point.

Ceragon Networks and WHA Public Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ceragon Networks and WHA Public

The main advantage of trading using opposite Ceragon Networks and WHA Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, WHA Public 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 WHA Public will offset losses from the drop in WHA Public's long position.
The idea behind Ceragon Networks and WHA Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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