As I stated in a previous post, there is absolutely no comparison between these two companies. In a scenario rosy enough to justify a $20 valuation for MBIA, Assured is worth $50+. It is entirely possible that MBIA shares ultimately prove worthless, but, but Assured is worth over $20. Doing a pairs trade is tempting even though I am not convinced that Assured is a great investment.
The reason for this is that if municipal credit losses grow to meaningful levels (say over 10 bps per year), Assured and MBIA are both bankrupt. If they do not, it will reveal municipal bond insurance to be worth very little, and the business model probably continues its death spiral. In the latter case, on an NPV cash flow basis, Assured's assets might be worth $8B more than liabilities, but this will be reduced by 30-40 years of future operating expenses, and the value will be released via dividends slowly over time. After expenses and on a risk-adjusted basis, the company might not be worth much more than the current market capitalization. It is possible that losses are manageable and the business model returns to prominence, in which case Assured is a home run.