Correlation Between RadNet and Wendys
Can any of the company-specific risk be diversified away by investing in both RadNet and Wendys 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 RadNet and Wendys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RadNet Inc and The Wendys Co, you can compare the effects of market volatilities on RadNet and Wendys 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 RadNet with a short position of Wendys. Check out your portfolio center. Please also check ongoing floating volatility patterns of RadNet and Wendys.
Diversification Opportunities for RadNet and Wendys
Modest diversification
The 3 months correlation between RadNet and Wendys is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding RadNet Inc and The Wendys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Wendys and RadNet 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 RadNet Inc are associated (or correlated) with Wendys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Wendys has no effect on the direction of RadNet i.e., RadNet and Wendys go up and down completely randomly.
Pair Corralation between RadNet and Wendys
Given the investment horizon of 90 days RadNet Inc is expected to generate 2.06 times more return on investment than Wendys. However, RadNet is 2.06 times more volatile than The Wendys Co. It trades about 0.22 of its potential returns per unit of risk. The Wendys Co is currently generating about -0.21 per unit of risk. If you would invest 6,709 in RadNet Inc on August 28, 2024 and sell it today you would earn a total of 1,436 from holding RadNet Inc or generate 21.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RadNet Inc vs. The Wendys Co
Performance |
| Timeline |
| RadNet Inc |
| The Wendys |
RadNet and Wendys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RadNet and Wendys
The main advantage of trading using opposite RadNet and Wendys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RadNet position performs unexpectedly, Wendys 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 Wendys will offset losses from the drop in Wendys' long position.| RadNet vs. Sotera Health Co | RadNet vs. Neogen | RadNet vs. Myriad Genetics | RadNet vs. bioAffinity Technologies Warrant |
| Wendys vs. Yum Brands | Wendys vs. Dominos Pizza | Wendys vs. Darden Restaurants | Wendys vs. Papa Johns International |
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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