Correlation Between Radcom and Latamgrowth SPAC

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

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

Diversification Opportunities for Radcom and Latamgrowth SPAC

0.0

Correlation Coefficient

Radcom  Latamgrowth SPAC

Pay attention - limited upside

The 3 months correlation between Radcom and Latamgrowth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Radcom and Latamgrowth SPAC Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latamgrowth SPAC Unit and Radcom 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 Radcom are associated (or correlated) with Latamgrowth SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latamgrowth SPAC Unit has no effect on the direction of Radcom i.e., Radcom and Latamgrowth SPAC go up and down completely randomly.

Pair Corralation between Radcom and Latamgrowth SPAC

Given the investment horizon of 90 days Radcom is expected to generate 2.14 times more return on investment than Latamgrowth SPAC. However, Radcom is 2.14 times more volatile than Latamgrowth SPAC Unit. It trades about 0.11 of its potential returns per unit of risk. Latamgrowth SPAC Unit is currently generating about 0.02 per unit of risk. If you would invest  946.00  in Radcom on September 16, 2024 and sell it today you would earn a total of  220.00  from holding Radcom or generate 23.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Radcom  vs.  Latamgrowth SPAC Unit

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.

Latamgrowth SPAC Unit

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Latamgrowth SPAC Unit are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Latamgrowth SPAC is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Radcom and Latamgrowth SPAC

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

The idea behind Radcom and Latamgrowth SPAC Unit 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.