Correlation Between Imax Corp and Radcom

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

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

Diversification Opportunities for Imax Corp and Radcom

0.75

Correlation Coefficient

Imax Corp  Radcom

Poor diversification

The 3 months correlation between Imax and Radcom is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Imax Corp and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom and Imax Corp 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 Imax 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 Imax Corp i.e., Imax Corp and Radcom go up and down completely randomly.

Pair Corralation between Imax Corp and Radcom

Given the investment horizon of 90 days Imax Corp is expected to generate 1.59 times less return on investment than Radcom. But when comparing it to its historical volatility, Imax Corp is 1.82 times less risky than Radcom. It trades about 0.17 of its potential returns per unit of risk. Radcom is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,080  in Radcom on April 25, 2025 and sell it today you would earn a total of  313.00  from holding Radcom or generate 28.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Imax Corp  vs.  Radcom

Imax Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Imax Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Imax Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Radcom

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Radcom displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Imax Corp and Radcom

The main advantage of trading using opposite Imax Corp and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imax Corp 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 Imax 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.