Correlation Between Bowhead Specialty and Assurant
Can any of the company-specific risk be diversified away by investing in both Bowhead Specialty 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 Bowhead Specialty and Assurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bowhead Specialty Holdings and Assurant, you can compare the effects of market volatilities on Bowhead Specialty 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 Bowhead Specialty with a short position of Assurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowhead Specialty and Assurant.
Diversification Opportunities for Bowhead Specialty and Assurant
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bowhead and Assurant is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bowhead Specialty Holdings and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and Bowhead Specialty 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 Bowhead Specialty Holdings 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 Bowhead Specialty i.e., Bowhead Specialty and Assurant go up and down completely randomly.
Pair Corralation between Bowhead Specialty and Assurant
Considering the 90-day investment horizon Bowhead Specialty Holdings is expected to generate 1.12 times more return on investment than Assurant. However, Bowhead Specialty is 1.12 times more volatile than Assurant. It trades about 0.46 of its potential returns per unit of risk. Assurant is currently generating about 0.44 per unit of risk. If you would invest 2,997 in Bowhead Specialty Holdings on August 27, 2024 and sell it today you would earn a total of 583.00 from holding Bowhead Specialty Holdings or generate 19.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bowhead Specialty Holdings vs. Assurant
Performance |
| Timeline |
| Bowhead Specialty |
| Assurant |
Bowhead Specialty and Assurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bowhead Specialty and Assurant
The main advantage of trading using opposite Bowhead Specialty and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bowhead Specialty 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.| Bowhead Specialty vs. HF Sinclair Corp | Bowhead Specialty vs. Atmos Energy | Bowhead Specialty vs. NiSource | Bowhead Specialty vs. Black Hills |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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