Correlation Between Assurant and WR Berkley
Can any of the company-specific risk be diversified away by investing in both Assurant and WR Berkley 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 WR Berkley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assurant and WR Berkley, you can compare the effects of market volatilities on Assurant and WR Berkley 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 WR Berkley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assurant and WR Berkley.
Diversification Opportunities for Assurant and WR Berkley
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Assurant and WRB-PF is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and WR Berkley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WR Berkley 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 WR Berkley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WR Berkley has no effect on the direction of Assurant i.e., Assurant and WR Berkley go up and down completely randomly.
Pair Corralation between Assurant and WR Berkley
Considering the 90-day investment horizon Assurant is expected to under-perform the WR Berkley. In addition to that, Assurant is 1.56 times more volatile than WR Berkley. It trades about -0.35 of its total potential returns per unit of risk. WR Berkley is currently generating about -0.23 per unit of volatility. If you would invest 2,145 in WR Berkley on November 27, 2024 and sell it today you would lose (62.00) from holding WR Berkley or give up 2.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Assurant vs. WR Berkley
Performance |
| Timeline |
| Assurant |
| WR Berkley |
Assurant and WR Berkley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assurant and WR Berkley
The main advantage of trading using opposite Assurant and WR Berkley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assurant position performs unexpectedly, WR Berkley 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 WR Berkley will offset losses from the drop in WR Berkley's long position.| Assurant vs. Assured Guaranty | Assurant vs. Ambac Financial Group | Assurant vs. AMERISAFE | Assurant vs. Enact Holdings |
| WR Berkley vs. W R Berkley | WR Berkley vs. Southern Co | WR Berkley vs. Aegon Funding | WR Berkley vs. American Financial Group |
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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