Correlation Between Radiant Cash and Bosch

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

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

Diversification Opportunities for Radiant Cash and Bosch

0.62

Correlation Coefficient

Radiant Cash  Bosch

Poor diversification

The 3 months correlation between Radiant and Bosch is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Radiant Cash Management and Bosch Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosch Limited and Radiant Cash 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 Radiant Cash Management are associated (or correlated) with Bosch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosch Limited has no effect on the direction of Radiant Cash i.e., Radiant Cash and Bosch go up and down completely randomly.

Pair Corralation between Radiant Cash and Bosch

Assuming the 90 days trading horizon Radiant Cash Management is expected to generate 0.96 times more return on investment than Bosch. However, Radiant Cash Management is 1.04 times less risky than Bosch. It trades about -0.02 of its potential returns per unit of risk. Bosch Limited is currently generating about -0.18 per unit of risk. If you would invest  7,598  in Radiant Cash Management on October 23, 2024 and sell it today you would lose (156.00) from holding Radiant Cash Management or give up 2.05% of portfolio value over 90 days.

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

Radiant Cash Management  vs.  Bosch Limited

Radiant Cash Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Radiant Cash Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Radiant Cash is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Bosch Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bosch Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Radiant Cash and Bosch

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

The idea behind Radiant Cash Management and Bosch Limited 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.