Correlation Between Ceragon Networks and Wilmar International

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

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

Diversification Opportunities for Ceragon Networks and Wilmar International

-0.36

Correlation Coefficient

Ceragon Networks  Wilmar International

Very good diversification

The 3 months correlation between Ceragon and Wilmar is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Wilmar International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International 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 Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Wilmar International go up and down completely randomly.

Pair Corralation between Ceragon Networks and Wilmar International

Given the investment horizon of 90 days Ceragon Networks is expected to generate 2.08 times more return on investment than Wilmar International. However, Ceragon Networks is 2.08 times more volatile than Wilmar International Limited. It trades about 0.24 of its potential returns per unit of risk. Wilmar International Limited is currently generating about 0.03 per unit of risk. If you would invest  271.00  in Ceragon Networks on September 13, 2024 and sell it today you would earn a total of  220.00  from holding Ceragon Networks or generate 81.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Ceragon Networks  vs.  Wilmar International Limited

Ceragon Networks

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ceragon Networks are ranked lower than 18 (%) 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.

Wilmar International

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wilmar International Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, Wilmar International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ceragon Networks and Wilmar International

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

The idea behind Ceragon Networks and Wilmar International 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.