Correlation Between Assurant and W R

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

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

Diversification Opportunities for Assurant and W R

-0.36

Correlation Coefficient

Assurant  W R

Very good diversification

The 3 months correlation between Assurant and WRB-PE is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and W R Berkley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on W R Berkley 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 W R. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of W R Berkley has no effect on the direction of Assurant i.e., Assurant and W R go up and down completely randomly.

Pair Corralation between Assurant and W R

Considering the 90-day investment horizon Assurant is expected to generate 2.6 times more return on investment than W R. However, Assurant is 2.6 times more volatile than W R Berkley. It trades about 0.15 of its potential returns per unit of risk. W R Berkley is currently generating about 0.09 per unit of risk. If you would invest  16,752  in Assurant on September 19, 2024 and sell it today you would earn a total of  4,560  from holding Assurant or generate 27.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Assurant  vs.  W R Berkley

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.

W R Berkley

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days W R Berkley has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, W R is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Assurant and W R

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

The idea behind Assurant and W R Berkley 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.