Correlation Between Environmental Service and Assurant
Can any of the company-specific risk be diversified away by investing in both Environmental Service 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 Environmental Service and Assurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Environmental Service Professionals and Assurant, you can compare the effects of market volatilities on Environmental Service 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 Environmental Service with a short position of Assurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Environmental Service and Assurant.
Diversification Opportunities for Environmental Service and Assurant
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Environmental and Assurant is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Environmental Service Professi and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and Environmental Service 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 Environmental Service Professionals 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 Environmental Service i.e., Environmental Service and Assurant go up and down completely randomly.
Pair Corralation between Environmental Service and Assurant
If you would invest 19,507 in Assurant on August 31, 2024 and sell it today you would earn a total of 3,198 from holding Assurant or generate 16.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Environmental Service Professi vs. Assurant
Performance |
| Timeline |
| Environmental Service |
| Assurant |
Environmental Service and Assurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Environmental Service and Assurant
The main advantage of trading using opposite Environmental Service and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Environmental Service 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.The idea behind Environmental Service Professionals and Assurant pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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