Correlation Between Ceragon Networks and Costco Wholesale

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

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

Diversification Opportunities for Ceragon Networks and Costco Wholesale

-0.03

Correlation Coefficient

Ceragon Networks  Costco Wholesale

Good diversification

The 3 months correlation between Ceragon and Costco is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Costco Wholesale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale 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 Costco Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costco Wholesale Corp has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Costco Wholesale go up and down completely randomly.

Pair Corralation between Ceragon Networks and Costco Wholesale

Given the investment horizon of 90 days Ceragon Networks is expected to under-perform the Costco Wholesale. In addition to that, Ceragon Networks is 3.26 times more volatile than Costco Wholesale Corp. It trades about -0.18 of its total potential returns per unit of risk. Costco Wholesale Corp is currently generating about 0.01 per unit of volatility. If you would invest  4,269  in Costco Wholesale Corp on December 30, 2024 and sell it today you would earn a total of  8.00  from holding Costco Wholesale Corp or generate 0.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Ceragon Networks  vs.  Costco Wholesale Corp

Ceragon Networks

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ceragon Networks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Costco Wholesale Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Costco Wholesale Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Costco Wholesale is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ceragon Networks and Costco Wholesale

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

The idea behind Ceragon Networks and Costco Wholesale Corp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.