Correlation Between MSCI ACWI and Assurant
Can any of the company-specific risk be diversified away by investing in both MSCI ACWI 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 MSCI ACWI and Assurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSCI ACWI exAUCONSUMER and Assurant, you can compare the effects of market volatilities on MSCI ACWI 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 MSCI ACWI with a short position of Assurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSCI ACWI and Assurant.
Diversification Opportunities for MSCI ACWI and Assurant
Excellent diversification
The 3 months correlation between MSCI and Assurant is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding MSCI ACWI exAUCONSUMER and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and MSCI ACWI 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 MSCI ACWI exAUCONSUMER 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 MSCI ACWI i.e., MSCI ACWI and Assurant go up and down completely randomly.
Pair Corralation between MSCI ACWI and Assurant
Assuming the 90 days horizon MSCI ACWI exAUCONSUMER is expected to generate 0.08 times more return on investment than Assurant. However, MSCI ACWI exAUCONSUMER is 12.32 times less risky than Assurant. It trades about 0.6 of its potential returns per unit of risk. Assurant is currently generating about 0.0 per unit of risk. If you would invest 2,474 in MSCI ACWI exAUCONSUMER on October 25, 2024 and sell it today you would earn a total of 39.00 from holding MSCI ACWI exAUCONSUMER or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MSCI ACWI exAUCONSUMER vs. Assurant
Performance |
| Timeline |
| MSCI ACWI exAUCONSUMER |
| Assurant |
MSCI ACWI and Assurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSCI ACWI and Assurant
The main advantage of trading using opposite MSCI ACWI and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSCI ACWI 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.| MSCI ACWI vs. Harrow Health 8625 | MSCI ACWI vs. Babcock Wilcox Enterprises, | MSCI ACWI vs. Babcock Wilcox Enterprises | MSCI ACWI vs. TRINL |
| Assurant vs. American Financial Group | Assurant vs. Aegon Funding | Assurant vs. American Financial Group | Assurant vs. American Financial Group |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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