Correlation Between Radcom and Micromobility

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

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

Diversification Opportunities for Radcom and Micromobility

-0.81

Correlation Coefficient

Radcom  Micromobility

Pay attention - limited upside

The 3 months correlation between Radcom and Micromobility is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Radcom and Micromobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micromobility 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 Micromobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micromobility has no effect on the direction of Radcom i.e., Radcom and Micromobility go up and down completely randomly.

Pair Corralation between Radcom and Micromobility

Given the investment horizon of 90 days Radcom is expected to generate 0.2 times more return on investment than Micromobility. However, Radcom is 4.96 times less risky than Micromobility. It trades about 0.02 of its potential returns per unit of risk. Micromobility is currently generating about 0.0 per unit of risk. If you would invest  1,132  in Radcom on October 3, 2024 and sell it today you would earn a total of  104.00  from holding Radcom or generate 9.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	26.67%
Values	Daily Returns

Radcom  vs.  Micromobility

Radcom

Risk-Adjusted Performance

9 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 9 (%) 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.

Micromobility

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Micromobility has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable primary indicators, Micromobility 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 Micromobility

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

The idea behind Radcom and Micromobility 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..