Correlation Between Mapfre SA and Radian
Can any of the company-specific risk be diversified away by investing in both Mapfre SA 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 Mapfre SA and Radian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mapfre SA and Radian Group, you can compare the effects of market volatilities on Mapfre SA 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 Mapfre SA with a short position of Radian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapfre SA and Radian.
Diversification Opportunities for Mapfre SA and Radian
Modest diversification
The 3 months correlation between Mapfre and Radian is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Mapfre SA and Radian Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radian Group and Mapfre SA 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 Mapfre SA 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 Mapfre SA i.e., Mapfre SA and Radian go up and down completely randomly.
Pair Corralation between Mapfre SA and Radian
Assuming the 90 days trading horizon Mapfre SA is expected to generate 1.28 times less return on investment than Radian. But when comparing it to its historical volatility, Mapfre SA is 1.11 times less risky than Radian. It trades about 0.07 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 1,625 in Radian Group on September 22, 2024 and sell it today you would earn a total of 1,355 from holding Radian Group or generate 83.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mapfre SA vs. Radian Group
Performance |
Timeline |
Mapfre SA |
Radian Group |
Mapfre SA and Radian Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mapfre SA and Radian
The main advantage of trading using opposite Mapfre SA and Radian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mapfre SA 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.Mapfre SA vs. Autohome ADR | Mapfre SA vs. PKSHA TECHNOLOGY INC | Mapfre SA vs. Lion Biotechnologies | Mapfre SA vs. Neinor Homes SA |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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