Correlation Between CCC Intelligent and Radware
Can any of the company-specific risk be diversified away by investing in both CCC Intelligent and Radware 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 CCC Intelligent and Radware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCC Intelligent Solutions and Radware, you can compare the effects of market volatilities on CCC Intelligent and Radware 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 CCC Intelligent with a short position of Radware. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCC Intelligent and Radware.
Diversification Opportunities for CCC Intelligent and Radware
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CCC and Radware is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding CCC Intelligent Solutions and Radware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radware and CCC Intelligent 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 CCC Intelligent Solutions are associated (or correlated) with Radware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radware has no effect on the direction of CCC Intelligent i.e., CCC Intelligent and Radware go up and down completely randomly.
Pair Corralation between CCC Intelligent and Radware
Given the investment horizon of 90 days CCC Intelligent is expected to generate 1.57 times less return on investment than Radware. But when comparing it to its historical volatility, CCC Intelligent Solutions is 1.55 times less risky than Radware. It trades about 0.03 of its potential returns per unit of risk. Radware is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,002 in Radware on August 31, 2024 and sell it today you would earn a total of 374.00 from holding Radware or generate 18.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCC Intelligent Solutions vs. Radware
Performance |
| Timeline |
| CCC Intelligent Solutions |
| Radware |
CCC Intelligent and Radware Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCC Intelligent and Radware
The main advantage of trading using opposite CCC Intelligent and Radware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCC Intelligent position performs unexpectedly, Radware 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 Radware will offset losses from the drop in Radware's long position.The idea behind CCC Intelligent Solutions and Radware 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.| Radware vs. Evertec | Radware vs. Consensus Cloud Solutions | Radware vs. Global Blue Group | Radware vs. CSG Systems International |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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