Correlation Between Radcom and Spectrum Technology

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

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

Diversification Opportunities for Radcom and Spectrum Technology

-0.01

Correlation Coefficient

Radcom  Spectrum Technology

Good diversification

The 3 months correlation between Radcom and Spectrum is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Radcom and Spectrum Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum Technology 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 Spectrum Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum Technology has no effect on the direction of Radcom i.e., Radcom and Spectrum Technology go up and down completely randomly.

Pair Corralation between Radcom and Spectrum Technology

Given the investment horizon of 90 days Radcom is expected to generate 0.23 times more return on investment than Spectrum Technology. However, Radcom is 4.3 times less risky than Spectrum Technology. It trades about 0.01 of its potential returns per unit of risk. Spectrum Technology is currently generating about -0.13 per unit of risk. If you would invest  1,312  in Radcom on May 19, 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	98.41%
Values	Daily Returns

Radcom  vs.  Spectrum Technology

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 latest stock price disarray, may contribute to short-term losses for the investors.

Spectrum Technology

Risk-Adjusted Performance

Weakest

Over the last 90 days Spectrum Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Radcom and Spectrum Technology

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

The idea behind Radcom and Spectrum Technology 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.