Correlation Between FormFactor and Ceragon Networks
Can any of the company-specific risk be diversified away by investing in both FormFactor 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 FormFactor and Ceragon Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FormFactor and Ceragon Networks, you can compare the effects of market volatilities on FormFactor 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 FormFactor with a short position of Ceragon Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of FormFactor and Ceragon Networks.
Diversification Opportunities for FormFactor and Ceragon Networks
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FormFactor and Ceragon is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding FormFactor and Ceragon Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceragon Networks and FormFactor 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 FormFactor 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 FormFactor i.e., FormFactor and Ceragon Networks go up and down completely randomly.
Pair Corralation between FormFactor and Ceragon Networks
Given the investment horizon of 90 days FormFactor is expected to generate 0.94 times more return on investment than Ceragon Networks. However, FormFactor is 1.06 times less risky than Ceragon Networks. It trades about -0.08 of its potential returns per unit of risk. Ceragon Networks is currently generating about -0.08 per unit of risk. If you would invest 3,520 in FormFactor on June 10, 2025 and sell it today you would lose (584.00) from holding FormFactor or give up 16.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FormFactor vs. Ceragon Networks
Performance |
| Timeline |
| FormFactor |
| Ceragon Networks |
FormFactor and Ceragon Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FormFactor and Ceragon Networks
The main advantage of trading using opposite FormFactor and Ceragon Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FormFactor 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.| FormFactor vs. SolarEdge Technologies | FormFactor vs. First Solar | FormFactor vs. Sunrun Inc | FormFactor vs. Canadian Solar |
| Ceragon Networks vs. Aviat Networks | Ceragon Networks vs. AudioCodes | Ceragon Networks vs. Silicom | Ceragon Networks vs. Gilat Satellite Networks |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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