Correlation Between Postal Realty and Radcom
Can any of the company-specific risk be diversified away by investing in both Postal Realty 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 Postal Realty and Radcom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Realty Trust and Radcom, you can compare the effects of market volatilities on Postal Realty 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 Postal Realty with a short position of Radcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Realty and Radcom.
Diversification Opportunities for Postal Realty and Radcom
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Postal and Radcom is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Postal Realty Trust and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom and Postal Realty 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 Postal Realty Trust 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 Postal Realty i.e., Postal Realty and Radcom go up and down completely randomly.
Pair Corralation between Postal Realty and Radcom
Given the investment horizon of 90 days Postal Realty Trust is expected to under-perform the Radcom. But the stock apears to be less risky and, when comparing its historical volatility, Postal Realty Trust is 5.95 times less risky than Radcom. The stock trades about -0.16 of its potential returns per unit of risk. The Radcom is currently generating about 0.13 of returns per unit of risk over similar time horizon. 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 Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Realty Trust vs. Radcom
Performance |
| Timeline |
| Postal Realty Trust |
| Radcom |
Postal Realty and Radcom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Realty and Radcom
The main advantage of trading using opposite Postal Realty and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Realty 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.| Postal Realty vs. Office Properties Income | Postal Realty vs. Boston Properties | Postal Realty vs. SL Green Realty | Postal Realty vs. Alexandria Real Estate |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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