Correlation Between Grab Holdings and Assurant

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

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

Diversification Opportunities for Grab Holdings and Assurant

-0.62

Correlation Coefficient

Grab Holdings  Assurant

Excellent diversification

The 3 months correlation between Grab and Assurant is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Grab Holdings Limited and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and Grab Holdings 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 Grab Holdings Limited 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 Grab Holdings i.e., Grab Holdings and Assurant go up and down completely randomly.

Pair Corralation between Grab Holdings and Assurant

Assuming the 90 days horizon Grab Holdings Limited is expected to under-perform the Assurant. In addition to that, Grab Holdings is 5.16 times more volatile than Assurant. It trades about -0.17 of its total potential returns per unit of risk. Assurant is currently generating about -0.22 per unit of volatility. If you would invest  2,164  in Assurant on October 8, 2024 and sell it today you would lose (85.00) from holding Assurant or give up 3.93% of portfolio value over 90 days.

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

Grab Holdings Limited  vs.  Assurant

Grab Holdings Limited

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grab Holdings Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Grab Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

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 very healthy basic indicators, Assurant is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Grab Holdings and Assurant

The main advantage of trading using opposite Grab Holdings and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grab Holdings 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 Grab Holdings Limited 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.