Correlation Between RadNet and Fonar

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

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

Diversification Opportunities for RadNet and Fonar

0.71

Correlation Coefficient

RadNet  Fonar

Poor diversification

The 3 months correlation between RadNet and Fonar is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding RadNet Inc and Fonar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonar 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 Fonar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonar has no effect on the direction of RadNet i.e., RadNet and Fonar go up and down completely randomly.

Pair Corralation between RadNet and Fonar

Given the investment horizon of 90 days RadNet Inc is expected to under-perform the Fonar. In addition to that, RadNet is 1.58 times more volatile than Fonar. It trades about -0.18 of its total potential returns per unit of risk. Fonar is currently generating about -0.06 per unit of volatility. If you would invest  1,495  in Fonar on December 27, 2024 and sell it today you would lose (104.00) from holding Fonar or give up 6.96% of portfolio value over 90 days.

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

RadNet Inc  vs.  Fonar

RadNet Inc

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Fonar

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fonar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with RadNet and Fonar

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

The idea behind RadNet Inc and Fonar 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.