Correlation Between Selective Insurance and Assurant

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

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

Diversification Opportunities for Selective Insurance and Assurant

-0.02

Correlation Coefficient

Selective Insurance  Assurant

Good diversification

The 3 months correlation between Selective and Assurant is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Selective Insurance Group and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and Selective Insurance 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 Selective Insurance 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 Selective Insurance i.e., Selective Insurance and Assurant go up and down completely randomly.

Pair Corralation between Selective Insurance and Assurant

Assuming the 90 days horizon Selective Insurance is expected to generate 1.71 times less return on investment than Assurant. But when comparing it to its historical volatility, Selective Insurance Group is 2.84 times less risky than Assurant. It trades about 0.09 of its potential returns per unit of risk. Assurant is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  19,870  in Assurant on May 15, 2025 and sell it today you would earn a total of  1,072  from holding Assurant or generate 5.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Selective Insurance Group  vs.  Assurant

Selective Insurance

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Selective Insurance Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward indicators, Selective Insurance is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Assurant

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Assurant are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain forward indicators, Assurant may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Selective Insurance and Assurant

The main advantage of trading using opposite Selective Insurance and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selective Insurance 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 Selective Insurance 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.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.