Correlation Between Ceragon Networks and Boxlight Corp
Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and Boxlight Corp 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 Boxlight Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and Boxlight Corp Class, you can compare the effects of market volatilities on Ceragon Networks and Boxlight Corp 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 Boxlight Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and Boxlight Corp.
Diversification Opportunities for Ceragon Networks and Boxlight Corp
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ceragon and Boxlight is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Boxlight Corp Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boxlight Corp Class 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 Boxlight Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boxlight Corp Class has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Boxlight Corp go up and down completely randomly.
Pair Corralation between Ceragon Networks and Boxlight Corp
Given the investment horizon of 90 days Ceragon Networks is expected to under-perform the Boxlight Corp. But the stock apears to be less risky and, when comparing its historical volatility, Ceragon Networks is 2.6 times less risky than Boxlight Corp. The stock trades about -0.21 of its potential returns per unit of risk. The Boxlight Corp Class is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 62.00 in Boxlight Corp Class on March 10, 2024 and sell it today you would earn a total of 7.00 from holding Boxlight Corp Class or generate 11.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ceragon Networks vs. Boxlight Corp Class
Performance |
Timeline |
Ceragon Networks |
Boxlight Corp Class |
Ceragon Networks and Boxlight Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ceragon Networks and Boxlight Corp
The main advantage of trading using opposite Ceragon Networks and Boxlight Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, Boxlight Corp 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 Boxlight Corp will offset losses from the drop in Boxlight Corp's long position.Ceragon Networks vs. Motorola Solutions | Ceragon Networks vs. Ciena Corp | Ceragon Networks vs. Hewlett Packard Enterprise | Ceragon Networks vs. Extreme Networks |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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