Correlation Between VerifyMe and Ceragon Networks

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

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

Diversification Opportunities for VerifyMe and Ceragon Networks

-0.78

Correlation Coefficient

VerifyMe  Ceragon Networks

Pay attention - limited upside

The 3 months correlation between VerifyMe and Ceragon is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding VerifyMe and Ceragon Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceragon Networks and VerifyMe 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 VerifyMe 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 VerifyMe i.e., VerifyMe and Ceragon Networks go up and down completely randomly.

Pair Corralation between VerifyMe and Ceragon Networks

Given the investment horizon of 90 days VerifyMe is expected to under-perform the Ceragon Networks. In addition to that, VerifyMe is 1.4 times more volatile than Ceragon Networks. It trades about -0.13 of its total potential returns per unit of risk. Ceragon Networks is currently generating about 0.15 per unit of volatility. If you would invest  294.00  in Ceragon Networks on September 3, 2024 and sell it today you would earn a total of  122.00  from holding Ceragon Networks or generate 41.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

VerifyMe  vs.  Ceragon Networks

VerifyMe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VerifyMe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Ceragon Networks

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ceragon Networks are ranked lower than 12 (%) 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.

Pair Trading with VerifyMe and Ceragon Networks

The main advantage of trading using opposite VerifyMe and Ceragon Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VerifyMe 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 VerifyMe 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.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.