Correlation Between Radcom and Senstar Technologies
Can any of the company-specific risk be diversified away by investing in both Radcom and Senstar Technologies 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 Senstar Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Radcom and Senstar Technologies, you can compare the effects of market volatilities on Radcom and Senstar Technologies 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 Senstar Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radcom and Senstar Technologies.
Diversification Opportunities for Radcom and Senstar Technologies
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Radcom and Senstar is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Radcom and Senstar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senstar Technologies 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 Senstar Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senstar Technologies has no effect on the direction of Radcom i.e., Radcom and Senstar Technologies go up and down completely randomly.
Pair Corralation between Radcom and Senstar Technologies
Given the investment horizon of 90 days Radcom is expected to generate 1.14 times more return on investment than Senstar Technologies. However, Radcom is 1.14 times more volatile than Senstar Technologies. It trades about 0.07 of its potential returns per unit of risk. Senstar Technologies is currently generating about 0.05 per unit of risk. If you would invest 906.00 in Radcom on March 10, 2024 and sell it today you would earn a total of 40.00 from holding Radcom or generate 4.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Radcom vs. Senstar Technologies
Performance |
Timeline |
Radcom |
Senstar Technologies |
Radcom and Senstar Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Radcom and Senstar Technologies
The main advantage of trading using opposite Radcom and Senstar Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radcom position performs unexpectedly, Senstar Technologies 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 Senstar Technologies will offset losses from the drop in Senstar Technologies' long position.Radcom vs. Shenandoah Telecommunications Co | Radcom vs. Anterix | Radcom vs. SK Telecom Co | Radcom vs. Liberty Broadband Srs |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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