Correlation Between Assurant and Emera Maine
Can any of the company-specific risk be diversified away by investing in both Assurant and Emera Maine 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 Assurant and Emera Maine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assurant and Emera Maine PFD, you can compare the effects of market volatilities on Assurant and Emera Maine 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 Assurant with a short position of Emera Maine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assurant and Emera Maine.
Diversification Opportunities for Assurant and Emera Maine
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Assurant and Emera is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and Emera Maine PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emera Maine PFD and Assurant 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 Assurant are associated (or correlated) with Emera Maine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emera Maine PFD has no effect on the direction of Assurant i.e., Assurant and Emera Maine go up and down completely randomly.
Pair Corralation between Assurant and Emera Maine
Considering the 90-day investment horizon Assurant is expected to generate 4.13 times more return on investment than Emera Maine. However, Assurant is 4.13 times more volatile than Emera Maine PFD. It trades about 0.08 of its potential returns per unit of risk. Emera Maine PFD is currently generating about 0.0 per unit of risk. If you would invest 12,787 in Assurant on September 2, 2024 and sell it today you would earn a total of 9,923 from holding Assurant or generate 77.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 29.03% |
| Values | Daily Returns |
Assurant vs. Emera Maine PFD
Performance |
| Timeline |
| Assurant |
| Emera Maine PFD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Assurant and Emera Maine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assurant and Emera Maine
The main advantage of trading using opposite Assurant and Emera Maine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assurant position performs unexpectedly, Emera Maine 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 Emera Maine will offset losses from the drop in Emera Maine's long position.| Assurant vs. Assured Guaranty | Assurant vs. Ambac Financial Group | Assurant vs. AMERISAFE | Assurant vs. Enact Holdings |
| Emera Maine vs. Assurant | Emera Maine vs. QBE Insurance Group | Emera Maine vs. Direct Line Insurance | Emera Maine vs. The Hanover Insurance |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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