Correlation Between Binah Capital and Radcom

Can any of the company-specific risk be diversified away by investing in both Binah Capital and Radcom 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 Binah Capital and Radcom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Binah Capital Group, and Radcom, you can compare the effects of market volatilities on Binah Capital and Radcom 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 Binah Capital with a short position of Radcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binah Capital and Radcom.

Diversification Opportunities for Binah Capital and Radcom

0.04

Correlation Coefficient

Binah Capital  Radcom

Significant diversification

The 3 months correlation between Binah and Radcom is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Binah Capital Group, and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom and Binah Capital 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 Binah Capital Group, are associated (or correlated) with Radcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radcom has no effect on the direction of Binah Capital i.e., Binah Capital and Radcom go up and down completely randomly.

Pair Corralation between Binah Capital and Radcom

Assuming the 90 days horizon Binah Capital Group, is expected to generate 39.25 times more return on investment than Radcom. However, Binah Capital is 39.25 times more volatile than Radcom. It trades about 0.16 of its potential returns per unit of risk. Radcom is currently generating about 0.03 per unit of risk. If you would invest  1.20  in Binah Capital Group, on September 5, 2024 and sell it today you would earn a total of  4.94  from holding Binah Capital Group, or generate 411.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	38.79%
Values	Daily Returns

Binah Capital Group,  vs.  Radcom

Binah Capital Group,

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Binah Capital Group, are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Binah Capital showed solid returns over the last few months and may actually be approaching a breakup point.

Radcom

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Radcom displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Binah Capital and Radcom

The main advantage of trading using opposite Binah Capital and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binah Capital position performs unexpectedly, Radcom 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 Radcom will offset losses from the drop in Radcom's long position.

The idea behind Binah Capital Group, and Radcom pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.