Correlation Between Affiliated Managers and Assurant
Can any of the company-specific risk be diversified away by investing in both Affiliated Managers 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 Affiliated Managers and Assurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affiliated Managers Group, and Assurant, you can compare the effects of market volatilities on Affiliated Managers 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 Affiliated Managers with a short position of Assurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Managers and Assurant.
Diversification Opportunities for Affiliated Managers and Assurant
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Affiliated and Assurant is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Managers Group, and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and Affiliated Managers 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 Affiliated Managers 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 Affiliated Managers i.e., Affiliated Managers and Assurant go up and down completely randomly.
Pair Corralation between Affiliated Managers and Assurant
Given the investment horizon of 90 days Affiliated Managers Group, is expected to generate 1.52 times more return on investment than Assurant. However, Affiliated Managers is 1.52 times more volatile than Assurant. It trades about 0.14 of its potential returns per unit of risk. Assurant is currently generating about 0.1 per unit of risk. If you would invest 2,021 in Affiliated Managers Group, on July 16, 2024 and sell it today you would earn a total of 51.00 from holding Affiliated Managers Group, or generate 2.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Affiliated Managers Group, vs. Assurant
Performance |
Timeline |
Affiliated Managers |
Assurant |
Affiliated Managers and Assurant Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Affiliated Managers and Assurant
The main advantage of trading using opposite Affiliated Managers and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Managers 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.Affiliated Managers vs. Affiliated Managers Group | Affiliated Managers vs. Southern Company Series | Affiliated Managers vs. DTE Energy | Affiliated Managers vs. United States Cellular |
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Check out your portfolio center.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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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