Correlation Between PPL and Radcom

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

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

Diversification Opportunities for PPL and Radcom

0.15

Correlation Coefficient

PPL  Radcom

Average diversification

The 3 months correlation between PPL and Radcom is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding PPL Corp. and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom and PPL 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 PPL Corporation 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 PPL i.e., PPL and Radcom go up and down completely randomly.

Pair Corralation between PPL and Radcom

Considering the 90-day investment horizon PPL Corporation is expected to generate 0.33 times more return on investment than Radcom. However, PPL Corporation is 3.04 times less risky than Radcom. It trades about 0.16 of its potential returns per unit of risk. Radcom is currently generating about 0.03 per unit of risk. If you would invest  3,342  in PPL Corporation on July 4, 2025 and sell it today you would earn a total of  317.00  from holding PPL Corporation or generate 9.49% return on investment over 90 days.

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

PPL Corp.  vs.  Radcom

PPL Corporation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PPL Corporation are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, PPL may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Radcom

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Radcom are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Radcom is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with PPL and Radcom

The main advantage of trading using opposite PPL and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPL 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 PPL Corporation 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.