Correlation Between Boxlight Corp and Ceragon Networks

Can any of the company-specific risk be diversified away by investing in both Boxlight Corp 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 Boxlight Corp and Ceragon Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boxlight Corp Class and Ceragon Networks, you can compare the effects of market volatilities on Boxlight Corp 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 Boxlight Corp with a short position of Ceragon Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boxlight Corp and Ceragon Networks.

Diversification Opportunities for Boxlight Corp and Ceragon Networks

-0.53

Correlation Coefficient

Boxlight Corp  Ceragon Networks

Excellent diversification

The 3 months correlation between Boxlight and Ceragon is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Boxlight Corp Class and Ceragon Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceragon Networks and Boxlight Corp 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 Boxlight Corp Class 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 Boxlight Corp i.e., Boxlight Corp and Ceragon Networks go up and down completely randomly.

Pair Corralation between Boxlight Corp and Ceragon Networks

Given the investment horizon of 90 days Boxlight Corp is expected to generate 19.45 times less return on investment than Ceragon Networks. In addition to that, Boxlight Corp is 1.14 times more volatile than Ceragon Networks. It trades about 0.01 of its total potential returns per unit of risk. Ceragon Networks is currently generating about 0.23 per unit of volatility. If you would invest  269.00  in Ceragon Networks on September 17, 2024 and sell it today you would earn a total of  210.00  from holding Ceragon Networks or generate 78.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Boxlight Corp Class  vs.  Ceragon Networks

Boxlight Corp Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boxlight Corp Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Boxlight Corp is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Ceragon Networks

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ceragon Networks are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Ceragon Networks unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boxlight Corp and Ceragon Networks

The main advantage of trading using opposite Boxlight Corp and Ceragon Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boxlight Corp 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.

The idea behind Boxlight Corp Class and Ceragon Networks 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.