Correlation Between Radcom and Bridgetown Holdings

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

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

Diversification Opportunities for Radcom and Bridgetown Holdings

0.0

Correlation Coefficient

Radcom  Bridgetown Holdings

Pay attention - limited upside

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

Pair Corralation between Radcom and Bridgetown Holdings

If you would invest  1,200  in Radcom on October 11, 2024 and sell it today you would earn a total of  11.00  from holding Radcom or generate 0.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Radcom  vs.  Bridgetown Holdings

Radcom

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Radcom displayed solid returns over the last few months and may actually be approaching a breakup point.

Bridgetown Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bridgetown Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Bridgetown Holdings is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Radcom and Bridgetown Holdings

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

The idea behind Radcom and Bridgetown Holdings 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.