Correlation Between BAYNGR and Radcom

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

By analyzing existing cross correlation between BAYNGR 4875 25 JUN 48 and Radcom, you can compare the effects of market volatilities on BAYNGR 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 BAYNGR with a short position of Radcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAYNGR and Radcom.

Diversification Opportunities for BAYNGR and Radcom

-0.33

Correlation Coefficient

BAYNGR  Radcom

Very good diversification

The 3 months correlation between BAYNGR and Radcom is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding BAYNGR 4875 25 JUN 48 and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom and BAYNGR 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 BAYNGR 4875 25 JUN 48 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 BAYNGR i.e., BAYNGR and Radcom go up and down completely randomly.

Pair Corralation between BAYNGR and Radcom

Assuming the 90 days trading horizon BAYNGR 4875 25 JUN 48 is expected to generate 0.47 times more return on investment than Radcom. However, BAYNGR 4875 25 JUN 48 is 2.12 times less risky than Radcom. It trades about 0.14 of its potential returns per unit of risk. Radcom is currently generating about 0.0 per unit of risk. If you would invest  7,810  in BAYNGR 4875 25 JUN 48 on December 31, 2024 and sell it today you would earn a total of  1,112  from holding BAYNGR 4875 25 JUN 48 or generate 14.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.52%
Values	Daily Returns

BAYNGR 4875 25 JUN 48  vs.  Radcom

BAYNGR 4875 25

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BAYNGR 4875 25 JUN 48 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, BAYNGR sustained solid returns over the last few months and may actually be approaching a breakup point.

Radcom

Risk-Adjusted Performance

Very Weak

Over the last 90 days Radcom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Radcom is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with BAYNGR and Radcom

The main advantage of trading using opposite BAYNGR and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAYNGR 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 BAYNGR 4875 25 JUN 48 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..