Correlation Between Sweetgreen and Radcom

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

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

Diversification Opportunities for Sweetgreen and Radcom

0.0

Correlation Coefficient

Sweetgreen  Radcom

Pay attention - limited upside

The 3 months correlation between Sweetgreen and Radcom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom and Sweetgreen 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 Sweetgreen are associated (or correlated) with Radcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radcom has no effect on the direction of Sweetgreen i.e., Sweetgreen and Radcom go up and down completely randomly.

Pair Corralation between Sweetgreen and Radcom

Allowing for the 90-day total investment horizon Sweetgreen is expected to under-perform the Radcom. In addition to that, Sweetgreen is 1.21 times more volatile than Radcom. It trades about -0.04 of its total potential returns per unit of risk. Radcom is currently generating about 0.08 per unit of volatility. If you would invest  1,054  in Radcom on October 8, 2024 and sell it today you would earn a total of  161.00  from holding Radcom or generate 15.28% return on investment over 90 days.

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

Sweetgreen  vs.  Radcom

Sweetgreen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sweetgreen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Radcom

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 6 (%) 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.

Pair Trading with Sweetgreen and Radcom

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

The idea behind Sweetgreen and Radcom 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.