Correlation Between Enact Holdings and Radian
Can any of the company-specific risk be diversified away by investing in both Enact Holdings and Radian 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 Enact Holdings and Radian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enact Holdings and Radian Group, you can compare the effects of market volatilities on Enact Holdings and Radian 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 Enact Holdings with a short position of Radian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enact Holdings and Radian.
Diversification Opportunities for Enact Holdings and Radian
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enact and Radian is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Enact Holdings and Radian Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radian Group and Enact Holdings 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 Enact Holdings are associated (or correlated) with Radian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radian Group has no effect on the direction of Enact Holdings i.e., Enact Holdings and Radian go up and down completely randomly.
Pair Corralation between Enact Holdings and Radian
Considering the 90-day investment horizon Enact Holdings is expected to under-perform the Radian. But the etf apears to be less risky and, when comparing its historical volatility, Enact Holdings is 1.28 times less risky than Radian. The etf trades about -0.01 of its potential returns per unit of risk. The Radian Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,173 in Radian Group on October 20, 2024 and sell it today you would earn a total of 121.00 from holding Radian Group or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enact Holdings vs. Radian Group
Performance |
| Timeline |
| Enact Holdings |
| Radian Group |
Enact Holdings and Radian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enact Holdings and Radian
The main advantage of trading using opposite Enact Holdings and Radian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enact Holdings position performs unexpectedly, Radian 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 Radian will offset losses from the drop in Radian's long position.| Enact Holdings vs. Assured Guaranty | Enact Holdings vs. AMERISAFE | Enact Holdings vs. MBIA Inc | Enact Holdings vs. ICC Holdings |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |