Correlation Between Ceragon Networks and Aerodrome
Can any of the company-specific risk be diversified away by investing in both Ceragon Networks and Aerodrome 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 Aerodrome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceragon Networks and Aerodrome Group, you can compare the effects of market volatilities on Ceragon Networks and Aerodrome 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 Aerodrome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceragon Networks and Aerodrome.
Diversification Opportunities for Ceragon Networks and Aerodrome
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ceragon and Aerodrome is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Aerodrome Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerodrome Group 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 Aerodrome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerodrome Group has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Aerodrome go up and down completely randomly.
Pair Corralation between Ceragon Networks and Aerodrome
Given the investment horizon of 90 days Ceragon Networks is expected to under-perform the Aerodrome. But the stock apears to be less risky and, when comparing its historical volatility, Ceragon Networks is 1.8 times less risky than Aerodrome. The stock trades about -0.16 of its potential returns per unit of risk. The Aerodrome Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 7,600 in Aerodrome Group on January 20, 2024 and sell it today you would earn a total of 1,070 from holding Aerodrome Group or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Ceragon Networks vs. Aerodrome Group
Performance |
| Timeline |
| Ceragon Networks |
| Aerodrome Group |
Ceragon Networks and Aerodrome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceragon Networks and Aerodrome
The main advantage of trading using opposite Ceragon Networks and Aerodrome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceragon Networks position performs unexpectedly, Aerodrome 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 Aerodrome will offset losses from the drop in Aerodrome's long position.| Ceragon Networks vs. Cambium Networks Corp | Ceragon Networks vs. KVH Industries | Ceragon Networks vs. Knowles Cor | Ceragon Networks vs. AudioCodes |
| Aerodrome vs. EN Shoham Business | Aerodrome vs. Accel Solutions Group | Aerodrome vs. SR Accord | Aerodrome vs. Rapac Communication Infrastructure |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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