Correlation Between Ceragon Networks and Dharma Satya

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

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

Diversification Opportunities for Ceragon Networks and Dharma Satya

0.2

Correlation Coefficient

Ceragon Networks  Dharma Satya

Modest diversification

The 3 months correlation between Ceragon and Dharma is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Dharma Satya Nusantara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dharma Satya Nusantara 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 Dharma Satya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dharma Satya Nusantara has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Dharma Satya go up and down completely randomly.

Pair Corralation between Ceragon Networks and Dharma Satya

Given the investment horizon of 90 days Ceragon Networks is expected to generate 1.01 times more return on investment than Dharma Satya. However, Ceragon Networks is 1.01 times more volatile than Dharma Satya Nusantara. It trades about 0.18 of its potential returns per unit of risk. Dharma Satya Nusantara is currently generating about 0.13 per unit of risk. If you would invest  289.00  in Ceragon Networks on September 5, 2024 and sell it today you would earn a total of  150.00  from holding Ceragon Networks or generate 51.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Ceragon Networks  vs.  Dharma Satya Nusantara

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.

Dharma Satya Nusantara

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dharma Satya Nusantara are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Dharma Satya disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ceragon Networks and Dharma Satya

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

The idea behind Ceragon Networks and Dharma Satya Nusantara 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.