Correlation Between Assurant and ProAssurance
Can any of the company-specific risk be diversified away by investing in both Assurant and ProAssurance 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 ProAssurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assurant and ProAssurance, you can compare the effects of market volatilities on Assurant and ProAssurance 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 ProAssurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assurant and ProAssurance.
Diversification Opportunities for Assurant and ProAssurance
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Assurant and ProAssurance is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and ProAssurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProAssurance 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 ProAssurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProAssurance has no effect on the direction of Assurant i.e., Assurant and ProAssurance go up and down completely randomly.
Pair Corralation between Assurant and ProAssurance
Considering the 90-day investment horizon Assurant is expected to generate 0.65 times more return on investment than ProAssurance. However, Assurant is 1.53 times less risky than ProAssurance. It trades about 0.41 of its potential returns per unit of risk. ProAssurance is currently generating about 0.2 per unit of risk. If you would invest 19,371 in Assurant on August 24, 2024 and sell it today you would earn a total of 3,244 from holding Assurant or generate 16.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Assurant vs. ProAssurance
Performance |
| Timeline |
| Assurant |
| ProAssurance |
Assurant and ProAssurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assurant and ProAssurance
The main advantage of trading using opposite Assurant and ProAssurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assurant position performs unexpectedly, ProAssurance 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 ProAssurance will offset losses from the drop in ProAssurance's long position.| Assurant vs. Assured Guaranty | Assurant vs. Ambac Financial Group | Assurant vs. AMERISAFE | Assurant vs. Enact Holdings |
| ProAssurance vs. Amtech Systems | ProAssurance vs. Gold Fields Ltd | ProAssurance vs. Aegean Airlines SA | ProAssurance vs. Merck Company |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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