Correlation Between Radcom and Singapore Telecommunicatio

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

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

Diversification Opportunities for Radcom and Singapore Telecommunicatio

-0.64

Correlation Coefficient

Radcom  Singapore Telecommunicatio

Excellent diversification

The 3 months correlation between Radcom and Singapore is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Radcom and Singapore Telecommunications P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio 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 Singapore Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Telecommunicatio has no effect on the direction of Radcom i.e., Radcom and Singapore Telecommunicatio go up and down completely randomly.

Pair Corralation between Radcom and Singapore Telecommunicatio

Given the investment horizon of 90 days Radcom is expected to generate 1.13 times less return on investment than Singapore Telecommunicatio. In addition to that, Radcom is 2.2 times more volatile than Singapore Telecommunications PK. It trades about 0.02 of its total potential returns per unit of risk. Singapore Telecommunications PK is currently generating about 0.05 per unit of volatility. If you would invest  1,715  in Singapore Telecommunications PK on October 7, 2024 and sell it today you would earn a total of  544.00  from holding Singapore Telecommunications PK or generate 31.72% return on investment over 90 days.

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

Radcom  vs.  Singapore Telecommunications P

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.

Singapore Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Singapore Telecommunications PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Radcom and Singapore Telecommunicatio

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

The idea behind Radcom and Singapore Telecommunications PK 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..