Correlation Between RadNet and Exchange Bankshares

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

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

Diversification Opportunities for RadNet and Exchange Bankshares

0.01

Correlation Coefficient

RadNet  Exchange Bankshares

Significant diversification

The 3 months correlation between RadNet and Exchange is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding RadNet Inc and Exchange Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Bankshares 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 Exchange Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Bankshares has no effect on the direction of RadNet i.e., RadNet and Exchange Bankshares go up and down completely randomly.

Pair Corralation between RadNet and Exchange Bankshares

Given the investment horizon of 90 days RadNet is expected to generate 2.08 times less return on investment than Exchange Bankshares. In addition to that, RadNet is 2.02 times more volatile than Exchange Bankshares. It trades about 0.03 of its total potential returns per unit of risk. Exchange Bankshares is currently generating about 0.11 per unit of volatility. If you would invest  3,964  in Exchange Bankshares on October 26, 2024 and sell it today you would earn a total of  826.00  from holding Exchange Bankshares or generate 20.84% return on investment over 90 days.

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

RadNet Inc  vs.  Exchange Bankshares

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.

Exchange Bankshares

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Exchange Bankshares are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, Exchange Bankshares demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RadNet and Exchange Bankshares

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

The idea behind RadNet Inc and Exchange Bankshares 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.