Correlation Between Radcom and Niagara Mohawk
Can any of the company-specific risk be diversified away by investing in both Radcom and Niagara Mohawk 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 Niagara Mohawk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Radcom and Niagara Mohawk Power, you can compare the effects of market volatilities on Radcom and Niagara Mohawk 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 Niagara Mohawk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radcom and Niagara Mohawk.
Diversification Opportunities for Radcom and Niagara Mohawk
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Radcom and Niagara is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Radcom and Niagara Mohawk Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niagara Mohawk Power 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 Niagara Mohawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niagara Mohawk Power has no effect on the direction of Radcom i.e., Radcom and Niagara Mohawk go up and down completely randomly.
Pair Corralation between Radcom and Niagara Mohawk
Given the investment horizon of 90 days Radcom is expected to generate 1.84 times more return on investment than Niagara Mohawk. However, Radcom is 1.84 times more volatile than Niagara Mohawk Power. It trades about 0.08 of its potential returns per unit of risk. Niagara Mohawk Power is currently generating about 0.09 per unit of risk. If you would invest 946.00 in Radcom on September 5, 2024 and sell it today you would earn a total of 243.00 from holding Radcom or generate 25.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Radcom vs. Niagara Mohawk Power
Performance |
| Timeline |
| Radcom |
| Niagara Mohawk Power |
Radcom and Niagara Mohawk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Radcom and Niagara Mohawk
The main advantage of trading using opposite Radcom and Niagara Mohawk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radcom position performs unexpectedly, Niagara Mohawk 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 Niagara Mohawk will offset losses from the drop in Niagara Mohawk's long position.| Radcom vs. Cambium Networks Corp | Radcom vs. KVH Industries | Radcom vs. Knowles Cor | Radcom vs. Ituran Location and |
| Niagara Mohawk vs. Teleflex Incorporated | Niagara Mohawk vs. HUTCHMED DRC | Niagara Mohawk vs. Amgen Inc | Niagara Mohawk vs. Radcom |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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