Correlation Between RadNet and Upbound

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

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

Diversification Opportunities for RadNet and Upbound

0.86

Correlation Coefficient

RadNet  Upbound

Very poor diversification

The 3 months correlation between RadNet and Upbound is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding RadNet Inc and Upbound Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upbound Group 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 Upbound. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upbound Group has no effect on the direction of RadNet i.e., RadNet and Upbound go up and down completely randomly.

Pair Corralation between RadNet and Upbound

Given the investment horizon of 90 days RadNet Inc is expected to generate 1.12 times more return on investment than Upbound. However, RadNet is 1.12 times more volatile than Upbound Group. It trades about 0.11 of its potential returns per unit of risk. Upbound Group is currently generating about 0.04 per unit of risk. If you would invest  2,045  in RadNet Inc on October 10, 2024 and sell it today you would earn a total of  5,198  from holding RadNet Inc or generate 254.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

RadNet Inc  vs.  Upbound Group

RadNet Inc

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in RadNet Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, RadNet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Upbound Group

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Upbound Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Upbound 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 Upbound

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

The idea behind RadNet Inc and Upbound Group 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.