Correlation Between Ceragon Networks and Calamos Market

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

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

Diversification Opportunities for Ceragon Networks and Calamos Market

0.62

Correlation Coefficient

Ceragon Networks  Calamos Market

Poor diversification

The 3 months correlation between Ceragon and Calamos is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Calamos Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Market Neutral 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 Calamos Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Market Neutral has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Calamos Market go up and down completely randomly.

Pair Corralation between Ceragon Networks and Calamos Market

Given the investment horizon of 90 days Ceragon Networks is expected to generate 28.33 times more return on investment than Calamos Market. However, Ceragon Networks is 28.33 times more volatile than Calamos Market Neutral. It trades about 0.15 of its potential returns per unit of risk. Calamos Market Neutral is currently generating about 0.24 per unit of risk. If you would invest  246.00  in Ceragon Networks on September 12, 2024 and sell it today you would earn a total of  204.00  from holding Ceragon Networks or generate 82.93% return on investment over 90 days.

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

Ceragon Networks  vs.  Calamos Market Neutral

Ceragon Networks

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ceragon Networks are ranked lower than 15 (%) 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.

Calamos Market Neutral

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Market Neutral are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Calamos Market is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ceragon Networks and Calamos Market

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

The idea behind Ceragon Networks and Calamos Market Neutral 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.