Correlation Between Alignment Healthcare and Radian

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

By analyzing existing cross correlation between Alignment Healthcare LLC and Radian Group, you can compare the effects of market volatilities on Alignment Healthcare 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 Alignment Healthcare with a short position of Radian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alignment Healthcare and Radian.

Diversification Opportunities for Alignment Healthcare and Radian

0.72

Correlation Coefficient

Alignment Healthcare  Radian

Poor diversification

The 3 months correlation between Alignment and Radian is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Alignment Healthcare LLC and Radian Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radian Group and Alignment Healthcare 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 Alignment Healthcare LLC 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 Alignment Healthcare i.e., Alignment Healthcare and Radian go up and down completely randomly.

Pair Corralation between Alignment Healthcare and Radian

Given the investment horizon of 90 days Alignment Healthcare LLC is expected to generate 1.96 times more return on investment than Radian. However, Alignment Healthcare is 1.96 times more volatile than Radian Group. It trades about 0.16 of its potential returns per unit of risk. Radian Group is currently generating about -0.02 per unit of risk. If you would invest  1,340  in Alignment Healthcare LLC on July 14, 2025 and sell it today you would earn a total of  391.00  from holding Alignment Healthcare LLC or generate 29.18% return on investment over 90 days.

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

Alignment Healthcare LLC  vs.  Radian Group

Alignment Healthcare LLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alignment Healthcare LLC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, Alignment Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

Radian Group

Risk-Adjusted Performance

Weakest

Over the last 90 days Radian Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Radian is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Alignment Healthcare and Radian

The main advantage of trading using opposite Alignment Healthcare and Radian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alignment Healthcare 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.

The idea behind Alignment Healthcare LLC and Radian Group 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.