Correlation Between Alpha Technology and Assurant
Can any of the company-specific risk be diversified away by investing in both Alpha Technology and Assurant 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 Alpha Technology and Assurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Technology Group and Assurant, you can compare the effects of market volatilities on Alpha Technology and Assurant 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 Alpha Technology with a short position of Assurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Technology and Assurant.
Diversification Opportunities for Alpha Technology and Assurant
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alpha and Assurant is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Technology Group and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and Alpha Technology 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 Alpha Technology Group are associated (or correlated) with Assurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assurant has no effect on the direction of Alpha Technology i.e., Alpha Technology and Assurant go up and down completely randomly.
Pair Corralation between Alpha Technology and Assurant
Given the investment horizon of 90 days Alpha Technology Group is expected to generate 9.72 times more return on investment than Assurant. However, Alpha Technology is 9.72 times more volatile than Assurant. It trades about 0.04 of its potential returns per unit of risk. Assurant is currently generating about 0.1 per unit of risk. If you would invest 2,819 in Alpha Technology Group on September 14, 2024 and sell it today you would lose (1,076) from holding Alpha Technology Group or give up 38.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alpha Technology Group vs. Assurant
Performance |
| Timeline |
| Alpha Technology |
| Assurant |
Alpha Technology and Assurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Technology and Assurant
The main advantage of trading using opposite Alpha Technology and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Technology position performs unexpectedly, Assurant 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 Assurant will offset losses from the drop in Assurant's long position.| Alpha Technology vs. Assurant | Alpha Technology vs. Pekin Life Insurance | Alpha Technology vs. The Hanover Insurance | Alpha Technology vs. Teradyne |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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