Correlation Between AudioCodes and Wireless Telecom

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

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

Diversification Opportunities for AudioCodes and Wireless Telecom

-0.44

Correlation Coefficient

AudioCodes  Wireless Telecom

Very good diversification

The 3 months correlation between AudioCodes and Wireless is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding AudioCodes and Wireless Telecom Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Telecom and AudioCodes 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 AudioCodes are associated (or correlated) with Wireless Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Telecom has no effect on the direction of AudioCodes i.e., AudioCodes and Wireless Telecom go up and down completely randomly.

Pair Corralation between AudioCodes and Wireless Telecom

If you would invest  936.00  in AudioCodes on September 17, 2024 and sell it today you would lose (12.00) from holding AudioCodes or give up 1.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

AudioCodes  vs.  Wireless Telecom Group

AudioCodes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AudioCodes has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, AudioCodes is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Wireless Telecom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wireless Telecom Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Wireless Telecom is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AudioCodes and Wireless Telecom

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

The idea behind AudioCodes and Wireless Telecom Group 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.