Correlation Between Frequency Electronics and Radcom
Can any of the company-specific risk be diversified away by investing in both Frequency Electronics 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 Frequency Electronics and Radcom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frequency Electronics and Radcom, you can compare the effects of market volatilities on Frequency Electronics 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 Frequency Electronics with a short position of Radcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frequency Electronics and Radcom.
Diversification Opportunities for Frequency Electronics and Radcom
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Frequency and Radcom is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Frequency Electronics and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom and Frequency Electronics 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 Frequency Electronics 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 Frequency Electronics i.e., Frequency Electronics and Radcom go up and down completely randomly.
Pair Corralation between Frequency Electronics and Radcom
Given the investment horizon of 90 days Frequency Electronics is expected to generate 1.58 times more return on investment than Radcom. However, Frequency Electronics is 1.58 times more volatile than Radcom. It trades about 0.22 of its potential returns per unit of risk. Radcom is currently generating about 0.11 per unit of risk. If you would invest 2,271 in Frequency Electronics on April 29, 2025 and sell it today you would earn a total of 516.00 from holding Frequency Electronics or generate 22.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frequency Electronics vs. Radcom
Performance |
| Timeline |
| Frequency Electronics |
| Radcom |
Frequency Electronics and Radcom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frequency Electronics and Radcom
The main advantage of trading using opposite Frequency Electronics and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frequency Electronics 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.| Frequency Electronics vs. Optical Cable | Frequency Electronics vs. KVH Industries | Frequency Electronics vs. Knowles Cor | Frequency Electronics vs. Comtech Telecommunications Corp |
| Radcom vs. Access Power Co | Radcom vs. PLDT Inc ADR | Radcom vs. BOS Better Online | Radcom vs. Sapiens International |
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 CEOs Directory module to screen CEOs from public companies around the world.
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