Correlation Between Ceragon Networks and Carlin Gold

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

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

Diversification Opportunities for Ceragon Networks and Carlin Gold

-0.12

Correlation Coefficient

Ceragon Networks  Carlin Gold

Good diversification

The 3 months correlation between Ceragon and Carlin is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Carlin Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlin Gold 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 Carlin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlin Gold has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Carlin Gold go up and down completely randomly.

Pair Corralation between Ceragon Networks and Carlin Gold

Given the investment horizon of 90 days Ceragon Networks is expected to generate 0.95 times more return on investment than Carlin Gold. However, Ceragon Networks is 1.05 times less risky than Carlin Gold. It trades about 0.15 of its potential returns per unit of risk. Carlin Gold is currently generating about -0.02 per unit of risk. If you would invest  294.00  in Ceragon Networks on September 4, 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ceragon Networks  vs.  Carlin Gold

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.

Carlin Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlin Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Carlin Gold is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Ceragon Networks and Carlin Gold

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

The idea behind Ceragon Networks and Carlin Gold 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.