Correlation Between Assurant and GDEV

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

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

Diversification Opportunities for Assurant and GDEV

-0.2

Correlation Coefficient

Assurant  GDEV

Good diversification

The 3 months correlation between Assurant and GDEV is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Assurant and GDEV Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDEV 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 GDEV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDEV Inc has no effect on the direction of Assurant i.e., Assurant and GDEV go up and down completely randomly.

Pair Corralation between Assurant and GDEV

Considering the 90-day investment horizon Assurant is expected to under-perform the GDEV. But the stock apears to be less risky and, when comparing its historical volatility, Assurant is 1.79 times less risky than GDEV. The stock trades about -0.32 of its potential returns per unit of risk. The GDEV Inc is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  230.00  in GDEV Inc on January 30, 2024 and sell it today you would lose (7.00) from holding GDEV Inc or give up 3.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Assurant  vs.  GDEV Inc

Assurant

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Assurant are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward indicators, Assurant is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

GDEV Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GDEV Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, GDEV is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Assurant and GDEV

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

The idea behind Assurant and GDEV 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.