Correlation Between Radcom and Hub Cyber

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

By analyzing existing cross correlation between Radcom and Hub Cyber Security, you can compare the effects of market volatilities on Radcom and Hub Cyber 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 Hub Cyber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radcom and Hub Cyber.

Diversification Opportunities for Radcom and Hub Cyber

0.23

Correlation Coefficient

Radcom  Hub Cyber

Modest diversification

The 3 months correlation between Radcom and Hub is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Radcom and Hub Cyber Security in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hub Cyber Security 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 Hub Cyber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hub Cyber Security has no effect on the direction of Radcom i.e., Radcom and Hub Cyber go up and down completely randomly.

Pair Corralation between Radcom and Hub Cyber

Given the investment horizon of 90 days Radcom is expected to under-perform the Hub Cyber. But the stock apears to be less risky and, when comparing its historical volatility, Radcom is 18.02 times less risky than Hub Cyber. The stock trades about -0.06 of its potential returns per unit of risk. The Hub Cyber Security is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1.16  in Hub Cyber Security on October 7, 2024 and sell it today you would earn a total of  2.84  from holding Hub Cyber Security or generate 244.83% return on investment over 90 days.

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

Radcom  vs.  Hub Cyber Security

Radcom

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 8 (%) 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.

Hub Cyber Security

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hub Cyber Security are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, Hub Cyber showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Radcom and Hub Cyber

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

The idea behind Radcom and Hub Cyber Security 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.