Correlation Between Radcom and GoHealth
Can any of the company-specific risk be diversified away by investing in both Radcom and GoHealth 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 Radcom and GoHealth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Radcom and GoHealth, you can compare the effects of market volatilities on Radcom and GoHealth 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 Radcom with a short position of GoHealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radcom and GoHealth.
Diversification Opportunities for Radcom and GoHealth
Poor diversification
The 3 months correlation between Radcom and GoHealth is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Radcom and GoHealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoHealth and Radcom 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 Radcom are associated (or correlated) with GoHealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoHealth has no effect on the direction of Radcom i.e., Radcom and GoHealth go up and down completely randomly.
Pair Corralation between Radcom and GoHealth
Given the investment horizon of 90 days Radcom is expected to generate 1.02 times less return on investment than GoHealth. But when comparing it to its historical volatility, Radcom is 1.47 times less risky than GoHealth. It trades about 0.03 of its potential returns per unit of risk. GoHealth is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,181 in GoHealth on August 28, 2024 and sell it today you would lose (15.00) from holding GoHealth or give up 1.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Radcom vs. GoHealth
Performance |
| Timeline |
| Radcom |
| GoHealth |
Radcom and GoHealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Radcom and GoHealth
The main advantage of trading using opposite Radcom and GoHealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radcom position performs unexpectedly, GoHealth 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 GoHealth will offset losses from the drop in GoHealth's long position.| Radcom vs. Shenandoah Telecommunications Co | Radcom vs. Anterix | Radcom vs. SK Telecom Co | Radcom vs. Liberty Broadband Srs |
| GoHealth vs. eHealth | GoHealth vs. Tian Ruixiang Holdings | GoHealth vs. Huize Holding | GoHealth vs. Selectquote |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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