Correlation Between AudioCodes and C Mer
Can any of the company-specific risk be diversified away by investing in both AudioCodes and C Mer 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 AudioCodes and C Mer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AudioCodes and C Mer Industries, you can compare the effects of market volatilities on AudioCodes and C Mer 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 AudioCodes with a short position of C Mer. Check out your portfolio center. Please also check ongoing floating volatility patterns of AudioCodes and C Mer.
Diversification Opportunities for AudioCodes and C Mer
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AudioCodes and CMER is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding AudioCodes and C Mer Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Mer Industries and AudioCodes 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 AudioCodes are associated (or correlated) with C Mer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Mer Industries has no effect on the direction of AudioCodes i.e., AudioCodes and C Mer go up and down completely randomly.
Pair Corralation between AudioCodes and C Mer
Assuming the 90 days trading horizon AudioCodes is expected to generate 0.47 times more return on investment than C Mer. However, AudioCodes is 2.11 times less risky than C Mer. It trades about -0.64 of its potential returns per unit of risk. C Mer Industries is currently generating about -0.32 per unit of risk. If you would invest 488,300 in AudioCodes on January 25, 2024 and sell it today you would lose (85,300) from holding AudioCodes or give up 17.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AudioCodes vs. C Mer Industries
Performance |
| Timeline |
| AudioCodes |
| C Mer Industries |
AudioCodes and C Mer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AudioCodes and C Mer
The main advantage of trading using opposite AudioCodes and C Mer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AudioCodes position performs unexpectedly, C Mer 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 C Mer will offset losses from the drop in C Mer's long position.| AudioCodes vs. Tower Semiconductor | AudioCodes vs. Nova | AudioCodes vs. Nice | AudioCodes vs. Magic Software Enterprises |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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