Correlation Between Lendlease Global and Radcom

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

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

Diversification Opportunities for Lendlease Global and Radcom

-0.16

Correlation Coefficient

Lendlease Global  Radcom

Good diversification

The 3 months correlation between Lendlease and Radcom is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Global Commercial and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom and Lendlease Global 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 Lendlease Global Commercial 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 Lendlease Global i.e., Lendlease Global and Radcom go up and down completely randomly.

Pair Corralation between Lendlease Global and Radcom

Assuming the 90 days horizon Lendlease Global is expected to generate 3.61 times less return on investment than Radcom. But when comparing it to its historical volatility, Lendlease Global Commercial is 13.3 times less risky than Radcom. It trades about 0.13 of its potential returns per unit of risk. Radcom is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,187  in Radcom on December 21, 2024 and sell it today you would earn a total of  47.00  from holding Radcom or generate 3.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Lendlease Global Commercial  vs.  Radcom

Lendlease Global Com

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lendlease Global Commercial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Lendlease Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Radcom

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 2 (%) 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 April 2025.

Pair Trading with Lendlease Global and Radcom

The main advantage of trading using opposite Lendlease Global and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease Global 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 Lendlease Global Commercial 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.