Correlation Between Radcom and GOLDMAN

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

By analyzing existing cross correlation between Radcom and GOLDMAN SACHS GROUP, you can compare the effects of market volatilities on Radcom and GOLDMAN 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 GOLDMAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radcom and GOLDMAN.

Diversification Opportunities for Radcom and GOLDMAN

-0.25

Correlation Coefficient

Radcom  GOLDMAN

Very good diversification

The 3 months correlation between Radcom and GOLDMAN is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Radcom and GOLDMAN SACHS GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLDMAN SACHS GROUP 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 GOLDMAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLDMAN SACHS GROUP has no effect on the direction of Radcom i.e., Radcom and GOLDMAN go up and down completely randomly.

Pair Corralation between Radcom and GOLDMAN

Given the investment horizon of 90 days Radcom is expected to generate 1.64 times more return on investment than GOLDMAN. However, Radcom is 1.64 times more volatile than GOLDMAN SACHS GROUP. It trades about 0.08 of its potential returns per unit of risk. GOLDMAN SACHS GROUP is currently generating about 0.07 per unit of risk. If you would invest  1,169  in Radcom on March 10, 2025 and sell it today you would earn a total of  146.00  from holding Radcom or generate 12.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	23.44%
Values	Daily Returns

Radcom  vs.  GOLDMAN SACHS GROUP

Radcom

Risk-Adjusted Performance

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.

GOLDMAN SACHS GROUP

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GOLDMAN SACHS GROUP are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GOLDMAN may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Radcom and GOLDMAN

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

The idea behind Radcom and GOLDMAN SACHS 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.