Correlation Between Global Lights and Radcom
Can any of the company-specific risk be diversified away by investing in both Global Lights 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 Global Lights and Radcom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Lights Acquisition and Radcom, you can compare the effects of market volatilities on Global Lights 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 Global Lights with a short position of Radcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Lights and Radcom.
Diversification Opportunities for Global Lights and Radcom
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Radcom is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Global Lights Acquisition and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom and Global Lights 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 Global Lights Acquisition 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 Global Lights i.e., Global Lights and Radcom go up and down completely randomly.
Pair Corralation between Global Lights and Radcom
Assuming the 90 days horizon Global Lights Acquisition is expected to generate 0.03 times more return on investment than Radcom. However, Global Lights Acquisition is 28.99 times less risky than Radcom. It trades about 0.21 of its potential returns per unit of risk. Radcom is currently generating about -0.03 per unit of risk. If you would invest 1,085 in Global Lights Acquisition on November 28, 2024 and sell it today you would earn a total of 8.00 from holding Global Lights Acquisition or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Lights Acquisition vs. Radcom
Performance |
| Timeline |
| Global Lights Acquisition |
| Radcom |
Global Lights and Radcom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Lights and Radcom
The main advantage of trading using opposite Global Lights and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Lights 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.| Global Lights vs. Figs Inc | Global Lights vs. Boot Barn Holdings | Global Lights vs. The Gap, | Global Lights vs. Capri Holdings |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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