Correlation Between KVH Industries and Ceragon Networks
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Ceragon Networks 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 KVH Industries and Ceragon Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Ceragon Networks, you can compare the effects of market volatilities on KVH Industries and Ceragon Networks 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 KVH Industries with a short position of Ceragon Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Ceragon Networks.
Diversification Opportunities for KVH Industries and Ceragon Networks
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KVH and Ceragon is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Ceragon Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceragon Networks and KVH Industries 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 KVH Industries are associated (or correlated) with Ceragon Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceragon Networks has no effect on the direction of KVH Industries i.e., KVH Industries and Ceragon Networks go up and down completely randomly.
Pair Corralation between KVH Industries and Ceragon Networks
Given the investment horizon of 90 days KVH Industries is expected to generate 3.32 times less return on investment than Ceragon Networks. But when comparing it to its historical volatility, KVH Industries is 2.48 times less risky than Ceragon Networks. It trades about 0.32 of its potential returns per unit of risk. Ceragon Networks is currently generating about 0.43 of returns per unit of risk over similar time horizon. 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KVH Industries vs. Ceragon Networks
Performance |
| Timeline |
| KVH Industries |
| Ceragon Networks |
KVH Industries and Ceragon Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Ceragon Networks
The main advantage of trading using opposite KVH Industries and Ceragon Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Ceragon Networks 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 Ceragon Networks will offset losses from the drop in Ceragon Networks' long position.| KVH Industries vs. Ichor Holdings | KVH Industries vs. Fabrinet | KVH Industries vs. Hello Group | KVH Industries vs. Ultra Clean Holdings |
| Ceragon Networks vs. Cambium Networks Corp | Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Knowles Cor | Ceragon Networks vs. AudioCodes |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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