Correlation Between Radcom and Cayson Acquisition

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

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

Diversification Opportunities for Radcom and Cayson Acquisition

-0.04

Correlation Coefficient

Radcom  Cayson Acquisition

Good diversification

The 3 months correlation between Radcom and Cayson is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Radcom and Cayson Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cayson Acquisition Corp 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 Cayson Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cayson Acquisition Corp has no effect on the direction of Radcom i.e., Radcom and Cayson Acquisition go up and down completely randomly.

Pair Corralation between Radcom and Cayson Acquisition

Given the investment horizon of 90 days Radcom is expected to generate 2.81 times more return on investment than Cayson Acquisition. However, Radcom is 2.81 times more volatile than Cayson Acquisition Corp. It trades about 0.01 of its potential returns per unit of risk. Cayson Acquisition Corp is currently generating about -0.11 per unit of risk. If you would invest  1,312  in Radcom on May 18, 2025 and sell it today you would lose (11.00) from holding Radcom or give up 0.84% of portfolio value over 90 days.

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

Radcom  vs.  Cayson Acquisition Corp

Radcom

Risk-Adjusted Performance

Weakest

Over the last 90 days Radcom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Radcom is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Cayson Acquisition Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Cayson Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Radcom and Cayson Acquisition

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

The idea behind Radcom and Cayson Acquisition Corp 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.