Correlation Between Fidelity National and Assurant

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

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

Diversification Opportunities for Fidelity National and Assurant

0.19

Correlation Coefficient

Fidelity National  Assurant

Average diversification

The 3 months correlation between Fidelity and Assurant is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Financial and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and Fidelity National 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 Fidelity National Financial 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 Fidelity National i.e., Fidelity National and Assurant go up and down completely randomly.

Pair Corralation between Fidelity National and Assurant

Considering the 90-day investment horizon Fidelity National is expected to generate 1.46 times less return on investment than Assurant. In addition to that, Fidelity National is 1.17 times more volatile than Assurant. It trades about 0.05 of its total potential returns per unit of risk. Assurant is currently generating about 0.09 per unit of volatility. If you would invest  16,650  in Assurant on October 2, 2024 and sell it today you would earn a total of  4,683  from holding Assurant or generate 28.13% return on investment over 90 days.

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

Fidelity National Financial  vs.  Assurant

Fidelity National

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fidelity National Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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.

Pair Trading with Fidelity National and Assurant

The main advantage of trading using opposite Fidelity National and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National 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 Fidelity National Financial 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.