Correlation Between Assurant and MarketAxess Holdings

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

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

Diversification Opportunities for Assurant and MarketAxess Holdings

-0.46

Correlation Coefficient

Assurant  MarketAxess Holdings

Very good diversification

The 3 months correlation between Assurant and MarketAxess is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and MarketAxess Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarketAxess Holdings 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 MarketAxess Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MarketAxess Holdings has no effect on the direction of Assurant i.e., Assurant and MarketAxess Holdings go up and down completely randomly.

Pair Corralation between Assurant and MarketAxess Holdings

Considering the 90-day investment horizon Assurant is expected to generate 1.48 times more return on investment than MarketAxess Holdings. However, Assurant is 1.48 times more volatile than MarketAxess Holdings. It trades about 0.01 of its potential returns per unit of risk. MarketAxess Holdings is currently generating about -0.22 per unit of risk. If you would invest  21,140  in Assurant on October 23, 2024 and sell it today you would earn a total of  19.00  from holding Assurant or generate 0.09% return on investment over 90 days.

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

Assurant  vs.  MarketAxess Holdings

Assurant

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Assurant are ranked lower than 8 (%) 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 February 2025.

MarketAxess Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MarketAxess Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Assurant and MarketAxess Holdings

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

The idea behind Assurant and MarketAxess Holdings 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.