Correlation Between Assurant and Udemy

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

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

Diversification Opportunities for Assurant and Udemy

0.09

Correlation Coefficient

Assurant  Udemy

Significant diversification

The 3 months correlation between Assurant and Udemy is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and Udemy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Udemy Inc 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 Udemy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Udemy Inc has no effect on the direction of Assurant i.e., Assurant and Udemy go up and down completely randomly.

Pair Corralation between Assurant and Udemy

Considering the 90-day investment horizon Assurant is expected to generate 0.53 times more return on investment than Udemy. However, Assurant is 1.9 times less risky than Udemy. It trades about 0.16 of its potential returns per unit of risk. Udemy Inc is currently generating about 0.05 per unit of risk. If you would invest  19,718  in Assurant on September 4, 2024 and sell it today you would earn a total of  2,855  from holding Assurant or generate 14.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Assurant  vs.  Udemy Inc

Assurant

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Assurant are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, Assurant showed solid returns over the last few months and may actually be approaching a breakup point.

Udemy Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Udemy Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain primary indicators, Udemy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Assurant and Udemy

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

The idea behind Assurant and Udemy Inc 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 Global Correlations module to find global opportunities by holding instruments from different markets.