Correlation Between Assurant and Kemper

Can any of the company-specific risk be diversified away by investing in both Assurant and Kemper 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 Assurant and Kemper into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Assurant and Kemper, you can compare the effects of market volatilities on Assurant and Kemper 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 Assurant with a short position of Kemper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assurant and Kemper.

Diversification Opportunities for Assurant and Kemper

0.91

Correlation Coefficient

Assurant  Kemper

Almost no diversification

The 3 months correlation between Assurant and Kemper is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and Kemper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kemper and Assurant 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 Assurant are associated (or correlated) with Kemper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kemper has no effect on the direction of Assurant i.e., Assurant and Kemper go up and down completely randomly.

Pair Corralation between Assurant and Kemper

Considering the 90-day investment horizon Assurant is expected to generate 0.72 times more return on investment than Kemper. However, Assurant is 1.4 times less risky than Kemper. It trades about 0.12 of its potential returns per unit of risk. Kemper is currently generating about 0.07 per unit of risk. If you would invest  12,073  in Assurant on September 19, 2024 and sell it today you would earn a total of  9,660  from holding Assurant or generate 80.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Assurant  vs.  Kemper

Assurant

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Assurant are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, Assurant may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Kemper

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kemper are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Kemper may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Assurant and Kemper

The main advantage of trading using opposite Assurant and Kemper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assurant position performs unexpectedly, Kemper 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 Kemper will offset losses from the drop in Kemper's long position.

The idea behind Assurant and Kemper 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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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.