Correlation Between NetSol Technologies and RadNet

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

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

Diversification Opportunities for NetSol Technologies and RadNet

-0.51

Correlation Coefficient

NetSol Technologies  RadNet

Excellent diversification

The 3 months correlation between NetSol and RadNet is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding NetSol Technologies and RadNet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RadNet Inc and NetSol Technologies 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 NetSol Technologies are associated (or correlated) with RadNet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RadNet Inc has no effect on the direction of NetSol Technologies i.e., NetSol Technologies and RadNet go up and down completely randomly.

Pair Corralation between NetSol Technologies and RadNet

Given the investment horizon of 90 days NetSol Technologies is expected to under-perform the RadNet. But the stock apears to be less risky and, when comparing its historical volatility, NetSol Technologies is 1.27 times less risky than RadNet. The stock trades about -0.12 of its potential returns per unit of risk. The RadNet Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7,062  in RadNet Inc on October 12, 2024 and sell it today you would earn a total of  163.00  from holding RadNet Inc or generate 2.31% return on investment over 90 days.

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

NetSol Technologies  vs.  RadNet Inc

NetSol Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NetSol Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

RadNet Inc

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in RadNet Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, RadNet is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with NetSol Technologies and RadNet

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

The idea behind NetSol Technologies and RadNet Inc 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.