Correlation Between Ceragon Networks and Tanke Biosciences
Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and Tanke Biosciences 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 Tanke Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and Tanke Biosciences, you can compare the effects of market volatilities on Ceragon Networks and Tanke Biosciences 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 Tanke Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and Tanke Biosciences.
Diversification Opportunities for Ceragon Networks and Tanke Biosciences
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ceragon and Tanke is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Tanke Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanke Biosciences 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 Tanke Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanke Biosciences has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Tanke Biosciences go up and down completely randomly.
Pair Corralation between Ceragon Networks and Tanke Biosciences
Given the investment horizon of 90 days Ceragon Networks is expected to under-perform the Tanke Biosciences. But the stock apears to be less risky and, when comparing its historical volatility, Ceragon Networks is 4.17 times less risky than Tanke Biosciences. The stock trades about -0.2 of its potential returns per unit of risk. The Tanke Biosciences is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Tanke Biosciences on December 2, 2024 and sell it today you would earn a total of 0.74 from holding Tanke Biosciences or generate 24.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ceragon Networks vs. Tanke Biosciences
Performance |
Timeline |
Ceragon Networks |
Tanke Biosciences |
Ceragon Networks and Tanke Biosciences Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ceragon Networks and Tanke Biosciences
The main advantage of trading using opposite Ceragon Networks and Tanke Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, Tanke Biosciences 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 Tanke Biosciences will offset losses from the drop in Tanke Biosciences' long position.Ceragon Networks vs. Cambium Networks Corp | Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Knowles Cor | Ceragon Networks vs. AudioCodes |
Tanke Biosciences vs. C2E Energy | Tanke Biosciences vs. Supurva Healthcare Group | Tanke Biosciences vs. Kasten Inc | Tanke Biosciences vs. CTR Investments Consulting |
Check out your portfolio center.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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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