Correlation Between Ceragon Networks and Adi Sarana

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

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

Diversification Opportunities for Ceragon Networks and Adi Sarana

-0.27

Correlation Coefficient

Ceragon Networks  Adi Sarana

Very good diversification

The 3 months correlation between Ceragon and Adi is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Adi Sarana Armada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adi Sarana Armada 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 Adi Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adi Sarana Armada has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Adi Sarana go up and down completely randomly.

Pair Corralation between Ceragon Networks and Adi Sarana

Given the investment horizon of 90 days Ceragon Networks is expected to generate 3.82 times more return on investment than Adi Sarana. However, Ceragon Networks is 3.82 times more volatile than Adi Sarana Armada. It trades about 0.5 of its potential returns per unit of risk. Adi Sarana Armada is currently generating about 0.03 per unit of risk. If you would invest  242.00  in Ceragon Networks on September 5, 2024 and sell it today you would earn a total of  197.00  from holding Ceragon Networks or generate 81.4% 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.  Adi Sarana Armada

Ceragon Networks

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ceragon Networks are ranked lower than 14 (%) 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.

Adi Sarana Armada

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adi Sarana Armada has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Adi Sarana is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Ceragon Networks and Adi Sarana

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

The idea behind Ceragon Networks and Adi Sarana Armada 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.