Correlation Between Ceragon Networks and Allianzgi Health

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

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

Diversification Opportunities for Ceragon Networks and Allianzgi Health

0.33

Correlation Coefficient

Ceragon Networks  Allianzgi Health

Weak diversification

The 3 months correlation between Ceragon and Allianzgi is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and Allianzgi Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Health Sciences 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 Allianzgi Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Health Sciences has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and Allianzgi Health go up and down completely randomly.

Pair Corralation between Ceragon Networks and Allianzgi Health

Given the investment horizon of 90 days Ceragon Networks is expected to under-perform the Allianzgi Health. In addition to that, Ceragon Networks is 2.49 times more volatile than Allianzgi Health Sciences. It trades about -0.18 of its total potential returns per unit of risk. Allianzgi Health Sciences is currently generating about 0.12 per unit of volatility. If you would invest  3,018  in Allianzgi Health Sciences on March 11, 2024 and sell it today you would earn a total of  58.00  from holding Allianzgi Health Sciences or generate 1.92% 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.  Allianzgi Health Sciences

Ceragon Networks

Risk-Adjusted Performance

0 of 100

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 latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Allianzgi Health Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allianzgi Health Sciences has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Allianzgi Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ceragon Networks and Allianzgi Health

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

The idea behind Ceragon Networks and Allianzgi Health Sciences 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.