Correlation Between CAVA Group, and Radcom
Can any of the company-specific risk be diversified away by investing in both CAVA Group, and Radcom 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 CAVA Group, and Radcom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAVA Group, and Radcom, you can compare the effects of market volatilities on CAVA Group, and Radcom 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 CAVA Group, with a short position of Radcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAVA Group, and Radcom.
Diversification Opportunities for CAVA Group, and Radcom
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CAVA and Radcom is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CAVA Group, and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom and CAVA Group, 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 CAVA Group, are associated (or correlated) with Radcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radcom has no effect on the direction of CAVA Group, i.e., CAVA Group, and Radcom go up and down completely randomly.
Pair Corralation between CAVA Group, and Radcom
Given the investment horizon of 90 days CAVA Group, is expected to generate 1.07 times more return on investment than Radcom. However, CAVA Group, is 1.07 times more volatile than Radcom. It trades about 0.14 of its potential returns per unit of risk. Radcom is currently generating about 0.08 per unit of risk. If you would invest 8,800 in CAVA Group, on September 1, 2024 and sell it today you would earn a total of 5,290 from holding CAVA Group, or generate 60.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAVA Group, vs. Radcom
Performance |
| Timeline |
| CAVA Group, |
| Radcom |
CAVA Group, and Radcom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAVA Group, and Radcom
The main advantage of trading using opposite CAVA Group, and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAVA Group, position performs unexpectedly, Radcom 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 Radcom will offset losses from the drop in Radcom's long position.| CAVA Group, vs. The Wendys Co | CAVA Group, vs. Shake Shack | CAVA Group, vs. Papa Johns International | CAVA Group, vs. Darden Restaurants |
| Radcom vs. Shenandoah Telecommunications Co | Radcom vs. Anterix | Radcom vs. SK Telecom Co | Radcom vs. Liberty Broadband Srs |
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 Stocks Directory module to find actively traded stocks across global markets.
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