Correlation Between RadNet and CaliberCos

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

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

Diversification Opportunities for RadNet and CaliberCos

-0.72

Correlation Coefficient

RadNet  CaliberCos

Pay attention - limited upside

The 3 months correlation between RadNet and CaliberCos is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding RadNet Inc and CaliberCos Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaliberCos Class A and RadNet 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 RadNet Inc are associated (or correlated) with CaliberCos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaliberCos Class A has no effect on the direction of RadNet i.e., RadNet and CaliberCos go up and down completely randomly.

Pair Corralation between RadNet and CaliberCos

Given the investment horizon of 90 days RadNet is expected to generate 417.0 times less return on investment than CaliberCos. But when comparing it to its historical volatility, RadNet Inc is 1.96 times less risky than CaliberCos. It trades about 0.0 of its potential returns per unit of risk. CaliberCos Class A is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  67.00  in CaliberCos Class A on October 24, 2024 and sell it today you would lose (5.02) from holding CaliberCos Class A or give up 7.49% of portfolio value over 90 days.

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

RadNet Inc  vs.  CaliberCos Class A

RadNet Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

CaliberCos Class A

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CaliberCos Class A are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, CaliberCos is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with RadNet and CaliberCos

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

The idea behind RadNet Inc and CaliberCos Class A 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.