Correlation Between City View and Radient Technologies

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

By analyzing existing cross correlation between City View Green and Radient Technologies, you can compare the effects of market volatilities on City View and Radient 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 City View with a short position of Radient Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of City View and Radient Technologies.

Diversification Opportunities for City View and Radient Technologies

0.0

Correlation Coefficient

City View  Radient Technologies

Pay attention - limited upside

The 3 months correlation between City and Radient is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding City View Green and Radient Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radient Technologies and City View 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 City View Green are associated (or correlated) with Radient Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radient Technologies has no effect on the direction of City View i.e., City View and Radient Technologies go up and down completely randomly.

Pair Corralation between City View and Radient Technologies

Assuming the 90 days horizon City View is expected to generate 7.13 times less return on investment than Radient Technologies. But when comparing it to its historical volatility, City View Green is 3.5 times less risky than Radient Technologies. It trades about 0.06 of its potential returns per unit of risk. Radient Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  0.52  in Radient Technologies on October 10, 2024 and sell it today you would lose (0.52) from holding Radient Technologies or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

City View Green  vs.  Radient Technologies

City View Green

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in City View Green are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, City View reported solid returns over the last few months and may actually be approaching a breakup point.

Radient Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Radient Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Radient Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with City View and Radient Technologies

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

The idea behind City View Green and Radient Technologies 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.