Correlation Between Ceragon Networks and ASML HOLDING

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

By analyzing existing cross correlation between Ceragon Networks and ASML HOLDING NY, you can compare the effects of market volatilities on Ceragon Networks and ASML HOLDING 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 ASML HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and ASML HOLDING.

Diversification Opportunities for Ceragon Networks and ASML HOLDING

-0.19

Correlation Coefficient

Ceragon Networks  ASML HOLDING

Good diversification

The 3 months correlation between Ceragon and ASML is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and ASML HOLDING NY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML HOLDING NY 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 ASML HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML HOLDING NY has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and ASML HOLDING go up and down completely randomly.

Pair Corralation between Ceragon Networks and ASML HOLDING

Given the investment horizon of 90 days Ceragon Networks is expected to generate 3.72 times more return on investment than ASML HOLDING. However, Ceragon Networks is 3.72 times more volatile than ASML HOLDING NY. It trades about 0.51 of its potential returns per unit of risk. ASML HOLDING NY is currently generating about 0.16 per unit of risk. If you would invest  256.00  in Ceragon Networks on September 13, 2024 and sell it today you would earn a total of  235.00  from holding Ceragon Networks or generate 91.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Ceragon Networks  vs.  ASML HOLDING NY

Ceragon Networks

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ceragon Networks are ranked lower than 18 (%) 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.

ASML HOLDING NY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASML HOLDING NY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, ASML HOLDING is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ceragon Networks and ASML HOLDING

The main advantage of trading using opposite Ceragon Networks and ASML HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, ASML HOLDING 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 ASML HOLDING will offset losses from the drop in ASML HOLDING's long position.

The idea behind Ceragon Networks and ASML HOLDING NY 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.