Correlation Between James River and Assurant

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

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

Diversification Opportunities for James River and Assurant

-0.79

Correlation Coefficient

James River  Assurant

Pay attention - limited upside

The 3 months correlation between James and Assurant is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding James River Group and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and James River 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 James River Group 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 James River i.e., James River and Assurant go up and down completely randomly.

Pair Corralation between James River and Assurant

Given the investment horizon of 90 days James River Group is expected to generate 1.54 times more return on investment than Assurant. However, James River is 1.54 times more volatile than Assurant. It trades about 0.13 of its potential returns per unit of risk. Assurant is currently generating about 0.06 per unit of risk. If you would invest  455.00  in James River Group on October 20, 2024 and sell it today you would earn a total of  24.00  from holding James River Group or generate 5.27% return on investment over 90 days.

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

James River Group  vs.  Assurant

James River Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days James River Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Assurant

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Assurant are ranked lower than 8 (%) 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 February 2025.

Pair Trading with James River and Assurant

The main advantage of trading using opposite James River and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James River 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 James River Group 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.