Correlation Between Ceragon Networks and Empire Metals

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

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

Diversification Opportunities for Ceragon Networks and Empire Metals

-0.8

Correlation Coefficient

Ceragon Networks  Empire Metals

Pay attention - limited upside

The 3 months correlation between Ceragon and Empire is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Empire Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire Metals Limited 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 Empire Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire Metals Limited has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Empire Metals go up and down completely randomly.

Pair Corralation between Ceragon Networks and Empire Metals

Given the investment horizon of 90 days Ceragon Networks is expected to under-perform the Empire Metals. In addition to that, Ceragon Networks is 1.34 times more volatile than Empire Metals Limited. It trades about -0.16 of its total potential returns per unit of risk. Empire Metals Limited is currently generating about 0.24 per unit of volatility. If you would invest  660.00  in Empire Metals Limited on December 27, 2024 and sell it today you would earn a total of  475.00  from holding Empire Metals Limited or generate 71.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Ceragon Networks  vs.  Empire Metals Limited

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.

Empire Metals Limited

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Empire Metals Limited are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Empire Metals exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ceragon Networks and Empire Metals

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

The idea behind Ceragon Networks and Empire Metals Limited 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.