Correlation Between FREEPORT and Radcom

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

By analyzing existing cross correlation between FREEPORT MCMORAN INC 525 and Radcom, you can compare the effects of market volatilities on FREEPORT 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 FREEPORT with a short position of Radcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of FREEPORT and Radcom.

Diversification Opportunities for FREEPORT and Radcom

-0.27

Correlation Coefficient

FREEPORT  Radcom

Very good diversification

The 3 months correlation between FREEPORT and Radcom is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding FREEPORT MCMORAN INC 525 and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom and FREEPORT 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 FREEPORT MCMORAN INC 525 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 FREEPORT i.e., FREEPORT and Radcom go up and down completely randomly.

Pair Corralation between FREEPORT and Radcom

Assuming the 90 days trading horizon FREEPORT MCMORAN INC 525 is expected to under-perform the Radcom. But the bond apears to be less risky and, when comparing its historical volatility, FREEPORT MCMORAN INC 525 is 6.86 times less risky than Radcom. The bond trades about 0.0 of its potential returns per unit of risk. The Radcom is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  949.00  in Radcom on September 23, 2024 and sell it today you would earn a total of  240.00  from holding Radcom or generate 25.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

FREEPORT MCMORAN INC 525  vs.  Radcom

FREEPORT MCMORAN INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FREEPORT MCMORAN INC 525 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, FREEPORT is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the 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 unfluctuating fundamental indicators, Radcom displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FREEPORT and Radcom

The main advantage of trading using opposite FREEPORT and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FREEPORT 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 FREEPORT MCMORAN INC 525 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.