Correlation Between Arthur J and Assurant

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

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

Diversification Opportunities for Arthur J and Assurant

-0.18

Correlation Coefficient

Arthur J  Assurant

Good diversification

The 3 months correlation between Arthur and Assurant is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Arthur J Gallagher and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and Arthur J 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 Arthur J Gallagher 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 Arthur J i.e., Arthur J and Assurant go up and down completely randomly.

Pair Corralation between Arthur J and Assurant

Considering the 90-day investment horizon Arthur J Gallagher is expected to under-perform the Assurant. In addition to that, Arthur J is 1.33 times more volatile than Assurant. It trades about -0.32 of its total potential returns per unit of risk. Assurant is currently generating about -0.05 per unit of volatility. If you would invest  2,122  in Assurant on September 27, 2024 and sell it today you would lose (22.00) from holding Assurant or give up 1.04% of portfolio value over 90 days.

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

Arthur J Gallagher  vs.  Assurant

Arthur J Gallagher

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Arthur J Gallagher are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking indicators, Arthur J is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

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 Arthur J and Assurant

The main advantage of trading using opposite Arthur J and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arthur J 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 Arthur J Gallagher 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.