Correlation Between AXIS Capital and Assurant

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

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

Diversification Opportunities for AXIS Capital and Assurant

-0.67

Correlation Coefficient

AXIS Capital  Assurant

Excellent diversification

The 3 months correlation between AXIS and Assurant is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding AXIS Capital Holdings and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and AXIS Capital 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 AXIS Capital Holdings 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 AXIS Capital i.e., AXIS Capital and Assurant go up and down completely randomly.

Pair Corralation between AXIS Capital and Assurant

Considering the 90-day investment horizon AXIS Capital Holdings is expected to generate 1.56 times more return on investment than Assurant. However, AXIS Capital is 1.56 times more volatile than Assurant. It trades about 0.15 of its potential returns per unit of risk. Assurant is currently generating about 0.01 per unit of risk. If you would invest  6,898  in AXIS Capital Holdings on October 4, 2024 and sell it today you would earn a total of  1,962  from holding AXIS Capital Holdings or generate 28.44% return on investment over 90 days.

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

AXIS Capital Holdings  vs.  Assurant

AXIS Capital Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AXIS Capital Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, AXIS Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Assurant

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Assurant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady 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 AXIS Capital and Assurant

The main advantage of trading using opposite AXIS Capital and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXIS Capital 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.

The idea behind AXIS Capital Holdings and Assurant 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.