Correlation Between Intevac and Radware

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

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

Diversification Opportunities for Intevac and Radware

-0.41

Correlation Coefficient

Intevac  Radware

Very good diversification

The 3 months correlation between Intevac and Radware is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Intevac and Radware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radware and Intevac 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 Intevac are associated (or correlated) with Radware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radware has no effect on the direction of Intevac i.e., Intevac and Radware go up and down completely randomly.

Pair Corralation between Intevac and Radware

Given the investment horizon of 90 days Intevac is expected to under-perform the Radware. In addition to that, Intevac is 1.73 times more volatile than Radware. It trades about -0.08 of its total potential returns per unit of risk. Radware is currently generating about 0.1 per unit of volatility. If you would invest  2,120  in Radware on September 2, 2024 and sell it today you would earn a total of  256.00  from holding Radware or generate 12.08% return on investment over 90 days.

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

Intevac  vs.  Radware

Intevac

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intevac has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Radware

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Radware are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Radware may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Intevac and Radware

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

The idea behind Intevac and Radware 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.