Correlation Between Citizens and Assurant
Can any of the company-specific risk be diversified away by investing in both Citizens 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 Citizens and Assurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens and Assurant, you can compare the effects of market volatilities on Citizens 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 Citizens with a short position of Assurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens and Assurant.
Diversification Opportunities for Citizens and Assurant
Modest diversification
The 3 months correlation between Citizens and Assurant is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Citizens and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and Citizens 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 Citizens 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 Citizens i.e., Citizens and Assurant go up and down completely randomly.
Pair Corralation between Citizens and Assurant
Considering the 90-day investment horizon Citizens is expected to under-perform the Assurant. In addition to that, Citizens is 2.21 times more volatile than Assurant. It trades about -0.02 of its total potential returns per unit of risk. Assurant is currently generating about 0.52 per unit of volatility. If you would invest 19,176 in Assurant on September 2, 2024 and sell it today you would earn a total of 3,534 from holding Assurant or generate 18.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens vs. Assurant
Performance |
| Timeline |
| Citizens |
| Assurant |
Citizens and Assurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens and Assurant
The main advantage of trading using opposite Citizens and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens 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.| Citizens vs. CNO Financial Group | Citizens vs. Brighthouse Financial | Citizens vs. FG Annuities Life | Citizens vs. Prudential Public Limited |
| 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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