Correlation Between DAX Index and Radian
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By analyzing existing cross correlation between DAX Index and Radian Group, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Radian. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Radian.
Diversification Opportunities for DAX Index and Radian
Good diversification
The 3 months correlation between DAX and Radian is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Radian Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radian Group and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Radian go up and down completely randomly.
Pair Corralation between DAX Index and Radian
Assuming the 90 days trading horizon DAX Index is expected to generate 1.31 times less return on investment than Radian. But when comparing it to its historical volatility, DAX Index is 2.06 times less risky than Radian. It trades about 0.12 of its potential returns per unit of risk. Radian Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,803 in Radian Group on December 4, 2024 and sell it today you would earn a total of 1,317 from holding Radian Group or generate 73.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
DAX Index vs. Radian Group
Performance |
| Timeline |
DAX Index and Radian Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Radian Group
Pair trading matchups for Radian
Pair Trading with DAX Index and Radian
The main advantage of trading using opposite DAX Index and Radian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. Boston Beer Co | DAX Index vs. THAI BEVERAGE | DAX Index vs. SCANSOURCE | DAX Index vs. Strategic Education |
| Radian vs. Mapfre SA | Radian vs. First American Financial | Radian vs. MGIC Investment | Radian vs. Assured Guaranty |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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