Correlation Between REDSUN PROPERTIES and RADIANCE HLDGS

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

By analyzing existing cross correlation between REDSUN PROPERTIES GROUP and RADIANCE HLDGS GRPHD 01, you can compare the effects of market volatilities on REDSUN PROPERTIES and RADIANCE HLDGS 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 REDSUN PROPERTIES with a short position of RADIANCE HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of REDSUN PROPERTIES and RADIANCE HLDGS.

Diversification Opportunities for REDSUN PROPERTIES and RADIANCE HLDGS

0.34

Correlation Coefficient

REDSUN PROPERTIES  RADIANCE HLDGS

Weak diversification

The 3 months correlation between REDSUN and RADIANCE is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding REDSUN PROPERTIES GROUP and RADIANCE HLDGS GRPHD 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RADIANCE HLDGS GRPHD and REDSUN PROPERTIES 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 REDSUN PROPERTIES GROUP are associated (or correlated) with RADIANCE HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RADIANCE HLDGS GRPHD has no effect on the direction of REDSUN PROPERTIES i.e., REDSUN PROPERTIES and RADIANCE HLDGS go up and down completely randomly.

Pair Corralation between REDSUN PROPERTIES and RADIANCE HLDGS

Assuming the 90 days horizon REDSUN PROPERTIES GROUP is expected to generate 4.26 times more return on investment than RADIANCE HLDGS. However, REDSUN PROPERTIES is 4.26 times more volatile than RADIANCE HLDGS GRPHD 01. It trades about 0.03 of its potential returns per unit of risk. RADIANCE HLDGS GRPHD 01 is currently generating about -0.07 per unit of risk. If you would invest  0.30  in REDSUN PROPERTIES GROUP on December 21, 2024 and sell it today you would lose (0.10) from holding REDSUN PROPERTIES GROUP or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

REDSUN PROPERTIES GROUP  vs.  RADIANCE HLDGS GRPHD 01

REDSUN PROPERTIES

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in REDSUN PROPERTIES GROUP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, REDSUN PROPERTIES reported solid returns over the last few months and may actually be approaching a breakup point.

RADIANCE HLDGS GRPHD

Risk-Adjusted Performance

Very Weak

Over the last 90 days RADIANCE HLDGS GRPHD 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with REDSUN PROPERTIES and RADIANCE HLDGS

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

The idea behind REDSUN PROPERTIES GROUP and RADIANCE HLDGS GRPHD 01 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.