Correlation Between XL Fleet and Radcom

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

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

Diversification Opportunities for XL Fleet and Radcom

-0.78

Correlation Coefficient

XL Fleet  Radcom

Pay attention - limited upside

The 3 months correlation between XL Fleet and Radcom is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding XL Fleet Corp and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom and XL Fleet 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 XL Fleet Corp 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 XL Fleet i.e., XL Fleet and Radcom go up and down completely randomly.

Pair Corralation between XL Fleet and Radcom

If you would invest  1,034  in Radcom on September 29, 2024 and sell it today you would earn a total of  170.00  from holding Radcom or generate 16.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

XL Fleet Corp  vs.  Radcom

XL Fleet Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XL Fleet Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, XL Fleet is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Radcom

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 6 (%) 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 XL Fleet and Radcom

The main advantage of trading using opposite XL Fleet and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XL Fleet 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 XL Fleet Corp 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.