Correlation Between Assurant and Western Acquisition
Can any of the company-specific risk be diversified away by investing in both Assurant and Western Acquisition 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 Western Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assurant and Western Acquisition Ventures, you can compare the effects of market volatilities on Assurant and Western Acquisition 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 Western Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assurant and Western Acquisition.
Diversification Opportunities for Assurant and Western Acquisition
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Assurant and Western is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and Western Acquisition Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Acquisition 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 Western Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Acquisition has no effect on the direction of Assurant i.e., Assurant and Western Acquisition go up and down completely randomly.
Pair Corralation between Assurant and Western Acquisition
Considering the 90-day investment horizon Assurant is expected to generate 0.96 times more return on investment than Western Acquisition. However, Assurant is 1.04 times less risky than Western Acquisition. It trades about 0.09 of its potential returns per unit of risk. Western Acquisition Ventures is currently generating about 0.02 per unit of risk. If you would invest 12,462 in Assurant on September 4, 2024 and sell it today you would earn a total of 10,111 from holding Assurant or generate 81.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Assurant vs. Western Acquisition Ventures
Performance |
| Timeline |
| Assurant |
| Western Acquisition |
Assurant and Western Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assurant and Western Acquisition
The main advantage of trading using opposite Assurant and Western Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assurant position performs unexpectedly, Western Acquisition 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 Western Acquisition will offset losses from the drop in Western Acquisition'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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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