Correlation Between Radware and AudioCodes
Can any of the company-specific risk be diversified away by investing in both Radware and AudioCodes 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 Radware and AudioCodes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Radware and AudioCodes, you can compare the effects of market volatilities on Radware and AudioCodes 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 Radware with a short position of AudioCodes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radware and AudioCodes.
Diversification Opportunities for Radware and AudioCodes
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Radware and AudioCodes is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Radware and AudioCodes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AudioCodes and Radware 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 Radware are associated (or correlated) with AudioCodes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AudioCodes has no effect on the direction of Radware i.e., Radware and AudioCodes go up and down completely randomly.
Pair Corralation between Radware and AudioCodes
Given the investment horizon of 90 days Radware is expected to generate 0.78 times more return on investment than AudioCodes. However, Radware is 1.28 times less risky than AudioCodes. It trades about 0.02 of its potential returns per unit of risk. AudioCodes is currently generating about -0.03 per unit of risk. If you would invest 2,020 in Radware on August 28, 2024 and sell it today you would earn a total of 268.00 from holding Radware or generate 13.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Radware vs. AudioCodes
Performance |
| Timeline |
| Radware |
| AudioCodes |
Radware and AudioCodes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Radware and AudioCodes
The main advantage of trading using opposite Radware and AudioCodes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radware position performs unexpectedly, AudioCodes 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 AudioCodes will offset losses from the drop in AudioCodes' long position.| Radware vs. Ichor Holdings | Radware vs. Fabrinet | Radware vs. Hello Group | Radware vs. Ultra Clean Holdings |
| AudioCodes vs. Ichor Holdings | AudioCodes vs. Fabrinet | AudioCodes vs. Hello Group | AudioCodes vs. Ultra Clean Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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