Correlation Between Radcom and Aurinia Pharmaceuticals

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

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

Diversification Opportunities for Radcom and Aurinia Pharmaceuticals

0.14

Correlation Coefficient

Radcom  Aurinia Pharmaceuticals

Average diversification

The 3 months correlation between Radcom and Aurinia is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Radcom and Aurinia Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurinia Pharmaceuticals 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 Aurinia Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurinia Pharmaceuticals has no effect on the direction of Radcom i.e., Radcom and Aurinia Pharmaceuticals go up and down completely randomly.

Pair Corralation between Radcom and Aurinia Pharmaceuticals

Given the investment horizon of 90 days Radcom is expected to generate 6.94 times less return on investment than Aurinia Pharmaceuticals. But when comparing it to its historical volatility, Radcom is 1.2 times less risky than Aurinia Pharmaceuticals. It trades about 0.03 of its potential returns per unit of risk. Aurinia Pharmaceuticals is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  812.00  in Aurinia Pharmaceuticals on May 10, 2025 and sell it today you would earn a total of  331.00  from holding Aurinia Pharmaceuticals or generate 40.76% return on investment over 90 days.

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

Radcom  vs.  Aurinia Pharmaceuticals

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.

Aurinia Pharmaceuticals

Risk-Adjusted Performance

Good

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

Pair Trading with Radcom and Aurinia Pharmaceuticals

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

The idea behind Radcom and Aurinia Pharmaceuticals 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.