Correlation Between Ceragon Networks and CommScope Holding

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

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

Diversification Opportunities for Ceragon Networks and CommScope Holding

0.79

Correlation Coefficient

Ceragon Networks  CommScope Holding

Poor diversification

The 3 months correlation between Ceragon and CommScope is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ceragon Networks and CommScope Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CommScope Holding 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 CommScope Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CommScope Holding has no effect on the direction of Ceragon Networks i.e., Ceragon Networks and CommScope Holding go up and down completely randomly.

Pair Corralation between Ceragon Networks and CommScope Holding

Given the investment horizon of 90 days Ceragon Networks is expected to generate 6.8 times less return on investment than CommScope Holding. But when comparing it to its historical volatility, Ceragon Networks is 1.75 times less risky than CommScope Holding. It trades about 0.07 of its potential returns per unit of risk. CommScope Holding Co is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  391.00  in CommScope Holding Co on April 25, 2025 and sell it today you would earn a total of  431.00  from holding CommScope Holding Co or generate 110.23% return on investment over 90 days.

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

Ceragon Networks  vs.  CommScope Holding Co

Ceragon Networks

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ceragon Networks are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Ceragon Networks may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CommScope Holding

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CommScope Holding Co are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent primary indicators, CommScope Holding displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ceragon Networks and CommScope Holding

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

The idea behind Ceragon Networks and CommScope Holding Co 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.