Correlation Between Critical Metals and Radcom

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

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

Diversification Opportunities for Critical Metals and Radcom

0.22

Correlation Coefficient

Critical Metals  Radcom

Modest diversification

The 3 months correlation between Critical and Radcom is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Critical Metals Corp and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom and Critical Metals 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 Critical Metals Corp 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 Critical Metals i.e., Critical Metals and Radcom go up and down completely randomly.

Pair Corralation between Critical Metals and Radcom

Given the investment horizon of 90 days Critical Metals Corp is expected to under-perform the Radcom. In addition to that, Critical Metals is 1.28 times more volatile than Radcom. It trades about 0.0 of its total potential returns per unit of risk. Radcom is currently generating about 0.11 per unit of volatility. If you would invest  1,045  in Radcom on October 9, 2024 and sell it today you would earn a total of  145.00  from holding Radcom or generate 13.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Critical Metals Corp  vs.  Radcom

Critical Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Critical Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, Critical Metals is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Radcom

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Radcom may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Critical Metals and Radcom

The main advantage of trading using opposite Critical Metals and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Critical Metals 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 Critical Metals Corp 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 CEOs Directory module to screen CEOs from public companies around the world.