Correlation Between Allot Communications and C Mer
Can any of the company-specific risk be diversified away by investing in both Allot Communications 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 Allot Communications and C Mer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allot Communications and C Mer Industries, you can compare the effects of market volatilities on Allot Communications 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 Allot Communications with a short position of C Mer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allot Communications and C Mer.
Diversification Opportunities for Allot Communications and C Mer
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Allot and CMER is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Allot Communications 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 Allot Communications 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 Allot Communications 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 Allot Communications i.e., Allot Communications and C Mer go up and down completely randomly.
Pair Corralation between Allot Communications and C Mer
Assuming the 90 days trading horizon Allot Communications is expected to generate 0.8 times more return on investment than C Mer. However, Allot Communications is 1.24 times less risky than C Mer. It trades about 0.02 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 80,390 in Allot Communications on January 25, 2024 and sell it today you would earn a total of 110.00 from holding Allot Communications or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allot Communications vs. C Mer Industries
Performance |
| Timeline |
| Allot Communications |
| C Mer Industries |
Allot Communications and C Mer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allot Communications and C Mer
The main advantage of trading using opposite Allot Communications and C Mer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allot Communications 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.| Allot Communications vs. Tower Semiconductor | Allot Communications vs. Nova | Allot Communications vs. Nice | Allot Communications 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |