Correlation Between KROGER and Radcom

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

By analyzing existing cross correlation between KROGER 515 percent and Radcom, you can compare the effects of market volatilities on KROGER 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 KROGER with a short position of Radcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of KROGER and Radcom.

Diversification Opportunities for KROGER and Radcom

-0.4

Correlation Coefficient

KROGER  Radcom

Very good diversification

The 3 months correlation between KROGER and Radcom is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding KROGER 515 percent and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom and KROGER 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 KROGER 515 percent 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 KROGER i.e., KROGER and Radcom go up and down completely randomly.

Pair Corralation between KROGER and Radcom

Assuming the 90 days trading horizon KROGER 515 percent is expected to under-perform the Radcom. But the bond apears to be less risky and, when comparing its historical volatility, KROGER 515 percent is 2.08 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 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,092  in Radcom on October 25, 2024 and sell it today you would earn a total of  321.00  from holding Radcom or generate 29.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	73.02%
Values	Daily Returns

KROGER 515 percent  vs.  Radcom

KROGER 515 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KROGER 515 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KROGER is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Radcom

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 13 (%) 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 KROGER and Radcom

The main advantage of trading using opposite KROGER and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KROGER 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 KROGER 515 percent 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.