Correlation Between Viemed Healthcare and Assurant
Can any of the company-specific risk be diversified away by investing in both Viemed Healthcare 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 Viemed Healthcare and Assurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viemed Healthcare and Assurant, you can compare the effects of market volatilities on Viemed Healthcare 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 Viemed Healthcare with a short position of Assurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viemed Healthcare and Assurant.
Diversification Opportunities for Viemed Healthcare and Assurant
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Viemed and Assurant is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and Viemed Healthcare 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 Viemed Healthcare 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 Viemed Healthcare i.e., Viemed Healthcare and Assurant go up and down completely randomly.
Pair Corralation between Viemed Healthcare and Assurant
Considering the 90-day investment horizon Viemed Healthcare is expected to generate 9.39 times less return on investment than Assurant. In addition to that, Viemed Healthcare is 1.33 times more volatile than Assurant. It trades about 0.04 of its total potential returns per unit of risk. Assurant is currently generating about 0.52 per unit of volatility. If you would invest 19,170 in Assurant on September 1, 2024 and sell it today you would earn a total of 3,540 from holding Assurant or generate 18.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viemed Healthcare vs. Assurant
Performance |
| Timeline |
| Viemed Healthcare |
| Assurant |
Viemed Healthcare and Assurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viemed Healthcare and Assurant
The main advantage of trading using opposite Viemed Healthcare and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viemed Healthcare 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.| Viemed Healthcare vs. Profound Medical Corp | Viemed Healthcare vs. Si Bone | Viemed Healthcare vs. Nevro Corp | Viemed Healthcare vs. Paragon 28 |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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