Correlation Between Ceragon Networks and Gold Portfolio

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

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

Diversification Opportunities for Ceragon Networks and Gold Portfolio

-0.57

Correlation Coefficient

Ceragon Networks  Gold Portfolio

Excellent diversification

The 3 months correlation between Ceragon and Gold is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Gold Portfolio Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Portfolio 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 Gold Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Portfolio Gold has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Gold Portfolio go up and down completely randomly.

Pair Corralation between Ceragon Networks and Gold Portfolio

Given the investment horizon of 90 days Ceragon Networks is expected to generate 1.98 times more return on investment than Gold Portfolio. However, Ceragon Networks is 1.98 times more volatile than Gold Portfolio Gold. It trades about 0.05 of its potential returns per unit of risk. Gold Portfolio Gold is currently generating about 0.04 per unit of risk. If you would invest  168.00  in Ceragon Networks on December 2, 2024 and sell it today you would earn a total of  111.00  from holding Ceragon Networks or generate 66.07% return on investment over 90 days.

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

Ceragon Networks  vs.  Gold Portfolio Gold

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.

Gold Portfolio Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Portfolio Gold are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Gold Portfolio may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ceragon Networks and Gold Portfolio

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

The idea behind Ceragon Networks and Gold Portfolio 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.