Correlation Between Cambium Networks and Radcom

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Can any of the company-specific risk be diversified away by investing in both Cambium Networks 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 Cambium Networks and Radcom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambium Networks Corp and Radcom, you can compare the effects of market volatilities on Cambium Networks 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 Cambium Networks with a short position of Radcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambium Networks and Radcom.

Diversification Opportunities for Cambium Networks and Radcom

-0.76
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Cambium and Radcom is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cambium Networks Corp and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom and Cambium 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 Cambium Networks Corp 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 Cambium Networks i.e., Cambium Networks and Radcom go up and down completely randomly.

Pair Corralation between Cambium Networks and Radcom

Given the investment horizon of 90 days Cambium Networks Corp is expected to under-perform the Radcom. In addition to that, Cambium Networks is 1.12 times more volatile than Radcom. It trades about -0.24 of its total potential returns per unit of risk. Radcom is currently generating about 0.13 per unit of volatility. If you would invest  1,074  in Radcom on September 13, 2024 and sell it today you would earn a total of  126.00  from holding Radcom or generate 11.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Cambium Networks Corp  vs.  Radcom

 Performance 
       Timeline  
Cambium Networks Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cambium Networks Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's fundamental drivers remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
Radcom 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Radcom displayed solid returns over the last few months and may actually be approaching a breakup point.

Cambium Networks and Radcom Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cambium Networks and Radcom

The main advantage of trading using opposite Cambium Networks and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambium Networks 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.
The idea behind Cambium Networks Corp and Radcom 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.
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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