Correlation Between Ceragon Networks and POWR Lithium
Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and POWR Lithium 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 POWR Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and POWR Lithium Corp, you can compare the effects of market volatilities on Ceragon Networks and POWR Lithium 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 POWR Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and POWR Lithium.
Diversification Opportunities for Ceragon Networks and POWR Lithium
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ceragon and POWR is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and POWR Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POWR Lithium Corp 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 POWR Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POWR Lithium Corp has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and POWR Lithium go up and down completely randomly.
Pair Corralation between Ceragon Networks and POWR Lithium
Given the investment horizon of 90 days Ceragon Networks is expected to generate 5.24 times less return on investment than POWR Lithium. But when comparing it to its historical volatility, Ceragon Networks is 8.72 times less risky than POWR Lithium. It trades about 0.07 of its potential returns per unit of risk. POWR Lithium Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 30.00 in POWR Lithium Corp on September 6, 2024 and sell it today you would lose (26.18) from holding POWR Lithium Corp or give up 87.27% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 94.53% |
Values | Daily Returns |
Ceragon Networks vs. POWR Lithium Corp
Performance |
Timeline |
Ceragon Networks |
POWR Lithium Corp |
Ceragon Networks and POWR Lithium Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ceragon Networks and POWR Lithium
The main advantage of trading using opposite Ceragon Networks and POWR Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, POWR Lithium 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 POWR Lithium will offset losses from the drop in POWR Lithium's long position.Ceragon Networks vs. Cambium Networks Corp | Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Knowles Cor | Ceragon Networks vs. AudioCodes |
POWR Lithium vs. Sanyo Special Steel | POWR Lithium vs. Insteel Industries | POWR Lithium vs. Valneva SE ADR | POWR Lithium vs. BioNTech SE |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |