Correlation Between Assurant and Carlyle
Can any of the company-specific risk be diversified away by investing in both Assurant and Carlyle 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 Carlyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assurant and The Carlyle Group, you can compare the effects of market volatilities on Assurant and Carlyle 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 Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assurant and Carlyle.
Diversification Opportunities for Assurant and Carlyle
Poor diversification
The 3 months correlation between Assurant and Carlyle is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and The Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle 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 Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of Assurant i.e., Assurant and Carlyle go up and down completely randomly.
Pair Corralation between Assurant and Carlyle
Given the investment horizon of 90 days Assurant is expected to generate 0.91 times more return on investment than Carlyle. However, Assurant is 1.1 times less risky than Carlyle. It trades about 0.04 of its potential returns per unit of risk. The Carlyle Group is currently generating about 0.03 per unit of risk. If you would invest 1,831 in Assurant on August 31, 2024 and sell it today you would earn a total of 303.00 from holding Assurant or generate 16.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Assurant vs. The Carlyle Group
Performance |
| Timeline |
| Assurant |
| Carlyle Group |
Assurant and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assurant and Carlyle
The main advantage of trading using opposite Assurant and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assurant position performs unexpectedly, Carlyle 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 Carlyle will offset losses from the drop in Carlyle's long position.| Assurant vs. American Financial Group | Assurant vs. Aegon Funding | Assurant vs. American Financial Group | Assurant 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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