Correlation Between NOVHOL and Radcom

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

By analyzing existing cross correlation between NOVHOL 6625 15 APR 29 and Radcom, you can compare the effects of market volatilities on NOVHOL 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 NOVHOL with a short position of Radcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of NOVHOL and Radcom.

Diversification Opportunities for NOVHOL and Radcom

-0.28

Correlation Coefficient

NOVHOL  Radcom

Very good diversification

The 3 months correlation between NOVHOL and Radcom is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding NOVHOL 6625 15 APR 29 and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom and NOVHOL 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 NOVHOL 6625 15 APR 29 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 NOVHOL i.e., NOVHOL and Radcom go up and down completely randomly.

Pair Corralation between NOVHOL and Radcom

Assuming the 90 days trading horizon NOVHOL 6625 15 APR 29 is expected to under-perform the Radcom. But the bond apears to be less risky and, when comparing its historical volatility, NOVHOL 6625 15 APR 29 is 11.66 times less risky than Radcom. The bond trades about -0.16 of its potential returns per unit of risk. The Radcom is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,125  in Radcom on September 21, 2024 and sell it today you would earn a total of  64.00  from holding Radcom or generate 5.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

NOVHOL 6625 15 APR 29  vs.  Radcom

NOVHOL 6625 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NOVHOL 6625 15 APR 29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NOVHOL 6625 15 APR 29 investors.

Radcom

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Radcom displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NOVHOL and Radcom

The main advantage of trading using opposite NOVHOL and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NOVHOL 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 NOVHOL 6625 15 APR 29 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.