Correlation Between Ceragon Networks and Profunds Ultrashort

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

By analyzing existing cross correlation between Ceragon Networks and Profunds Ultrashort Nasdaq 100, you can compare the effects of market volatilities on Ceragon Networks and Profunds Ultrashort 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 Profunds Ultrashort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and Profunds Ultrashort.

Diversification Opportunities for Ceragon Networks and Profunds Ultrashort

-0.71

Correlation Coefficient

Ceragon Networks  Profunds Ultrashort

Pay attention - limited upside

The 3 months correlation between Ceragon and Profunds is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Profunds Ultrashort Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profunds Ultrashort 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 Profunds Ultrashort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profunds Ultrashort has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Profunds Ultrashort go up and down completely randomly.

Pair Corralation between Ceragon Networks and Profunds Ultrashort

Given the investment horizon of 90 days Ceragon Networks is expected to under-perform the Profunds Ultrashort. In addition to that, Ceragon Networks is 1.87 times more volatile than Profunds Ultrashort Nasdaq 100. It trades about -0.18 of its total potential returns per unit of risk. Profunds Ultrashort Nasdaq 100 is currently generating about 0.12 per unit of volatility. If you would invest  2,309  in Profunds Ultrashort Nasdaq 100 on December 29, 2024 and sell it today you would earn a total of  446.00  from holding Profunds Ultrashort Nasdaq 100 or generate 19.32% return on investment over 90 days.

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

Ceragon Networks  vs.  Profunds Ultrashort Nasdaq 100

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.

Profunds Ultrashort

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Profunds Ultrashort Nasdaq 100 are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Profunds Ultrashort showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ceragon Networks and Profunds Ultrashort

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

The idea behind Ceragon Networks and Profunds Ultrashort Nasdaq 100 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.