Correlation Between Assurant and Radian
Can any of the company-specific risk be diversified away by investing in both Assurant 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 Assurant and Radian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assurant and Radian Group, you can compare the effects of market volatilities on Assurant 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 Assurant with a short position of Radian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assurant and Radian.
Diversification Opportunities for Assurant and Radian
Significant diversification
The 3 months correlation between Assurant and Radian is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and Radian Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radian Group 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 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 Assurant i.e., Assurant and Radian go up and down completely randomly.
Pair Corralation between Assurant and Radian
Considering the 90-day investment horizon Assurant is expected to generate 0.58 times more return on investment than Radian. However, Assurant is 1.72 times less risky than Radian. It trades about 0.43 of its potential returns per unit of risk. Radian Group is currently generating about 0.04 per unit of risk. If you would invest 19,507 in Assurant on August 31, 2024 and sell it today you would earn a total of 3,198 from holding Assurant or generate 16.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Assurant vs. Radian Group
Performance |
| Timeline |
| Assurant |
| Radian Group |
Assurant and Radian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assurant and Radian
The main advantage of trading using opposite Assurant and Radian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assurant 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.| Assurant vs. Assured Guaranty | Assurant vs. Ambac Financial Group | Assurant vs. AMERISAFE | Assurant vs. Enact Holdings |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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