Correlation Between Cytta Corp and Ceragon Networks

Can any of the company-specific risk be diversified away by investing in both Cytta 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 Cytta 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 Cytta Corp and Ceragon Networks, you can compare the effects of market volatilities on Cytta 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 Cytta Corp with a short position of Ceragon Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cytta Corp and Ceragon Networks.

Diversification Opportunities for Cytta Corp and Ceragon Networks

0.31

Correlation Coefficient

Cytta Corp  Ceragon Networks

Weak diversification

The 3 months correlation between Cytta and Ceragon is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Cytta Corp and Ceragon Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceragon Networks and Cytta 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 Cytta Corp 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 Cytta Corp i.e., Cytta Corp and Ceragon Networks go up and down completely randomly.

Pair Corralation between Cytta Corp and Ceragon Networks

Given the investment horizon of 90 days Cytta Corp is expected to under-perform the Ceragon Networks. In addition to that, Cytta Corp is 2.15 times more volatile than Ceragon Networks. It trades about -0.03 of its total potential returns per unit of risk. Ceragon Networks is currently generating about 0.22 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  201.00  from holding Ceragon Networks or generate 74.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Cytta Corp  vs.  Ceragon Networks

Cytta Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cytta Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company 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 Cytta Corp and Ceragon Networks

The main advantage of trading using opposite Cytta Corp and Ceragon Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cytta 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 Cytta Corp 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.