Correlation Between Mobilicom Limited and Ceragon Networks

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

By analyzing existing cross correlation between Mobilicom Limited American and Ceragon Networks, you can compare the effects of market volatilities on Mobilicom Limited and Ceragon Networks 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 Mobilicom Limited with a short position of Ceragon Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobilicom Limited and Ceragon Networks.

Diversification Opportunities for Mobilicom Limited and Ceragon Networks

0.8

Correlation Coefficient

Mobilicom Limited  Ceragon Networks

Very poor diversification

The 3 months correlation between Mobilicom and Ceragon is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mobilicom Limited American and Ceragon Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceragon Networks and Mobilicom Limited 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 Mobilicom Limited American are associated (or correlated) with Ceragon Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceragon Networks has no effect on the direction of Mobilicom Limited i.e., Mobilicom Limited and Ceragon Networks go up and down completely randomly.

Pair Corralation between Mobilicom Limited and Ceragon Networks

Considering the 90-day investment horizon Mobilicom Limited American is expected to under-perform the Ceragon Networks. In addition to that, Mobilicom Limited is 1.71 times more volatile than Ceragon Networks. It trades about -0.26 of its total potential returns per unit of risk. Ceragon Networks is currently generating about -0.05 per unit of volatility. If you would invest  267.00  in Ceragon Networks on March 12, 2024 and sell it today you would lose (5.00) from holding Ceragon Networks or give up 1.87% of portfolio value over 90 days.

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

Mobilicom Limited American  vs.  Ceragon Networks

Mobilicom Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mobilicom Limited American has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in July 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Mobilicom Limited and Ceragon Networks

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

The idea behind Mobilicom Limited American and Ceragon Networks 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 CEOs Directory module to screen CEOs from public companies around the world.