Correlation Between Global Education and Assurant
Can any of the company-specific risk be diversified away by investing in both Global Education 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 Global Education and Assurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Education Communities and Assurant, you can compare the effects of market volatilities on Global Education 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 Global Education with a short position of Assurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Education and Assurant.
Diversification Opportunities for Global Education and Assurant
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Assurant is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Global Education Communities and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and Global Education 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 Global Education Communities 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 Global Education i.e., Global Education and Assurant go up and down completely randomly.
Pair Corralation between Global Education and Assurant
Assuming the 90 days horizon Global Education Communities is expected to under-perform the Assurant. In addition to that, Global Education is 4.41 times more volatile than Assurant. It trades about -0.04 of its total potential returns per unit of risk. Assurant is currently generating about 0.17 per unit of volatility. If you would invest 17,111 in Assurant on September 3, 2024 and sell it today you would earn a total of 5,462 from holding Assurant or generate 31.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Education Communities vs. Assurant
Performance |
| Timeline |
| Global Education Com |
| Assurant |
Global Education and Assurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Education and Assurant
The main advantage of trading using opposite Global Education and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Education 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.| Global Education vs. Legacy Education | Global Education vs. Apple Inc | Global Education vs. NVIDIA | Global Education vs. Microsoft |
| 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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