Correlation Between Assurant and Ryan Specialty

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

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

Diversification Opportunities for Assurant and Ryan Specialty

0.26

Correlation Coefficient

Assurant  Ryan Specialty

Modest diversification

The 3 months correlation between Assurant and Ryan is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and Ryan Specialty Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryan Specialty Group 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 Ryan Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryan Specialty Group has no effect on the direction of Assurant i.e., Assurant and Ryan Specialty go up and down completely randomly.

Pair Corralation between Assurant and Ryan Specialty

Considering the 90-day investment horizon Assurant is expected to generate 1.7 times less return on investment than Ryan Specialty. But when comparing it to its historical volatility, Assurant is 1.42 times less risky than Ryan Specialty. It trades about 0.09 of its potential returns per unit of risk. Ryan Specialty Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,217  in Ryan Specialty Group on October 2, 2024 and sell it today you would earn a total of  2,184  from holding Ryan Specialty Group or generate 51.8% return on investment over 90 days.

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

Assurant  vs.  Ryan Specialty Group

Assurant

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Assurant are ranked lower than 6 (%) 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.

Ryan Specialty Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ryan Specialty Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Assurant and Ryan Specialty

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

The idea behind Assurant and Ryan Specialty Group 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.