Correlation Between Aspen Insurance and Assurant
Can any of the company-specific risk be diversified away by investing in both Aspen 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 Aspen Insurance and Assurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspen Insurance Holdings and Assurant, you can compare the effects of market volatilities on Aspen 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 Aspen Insurance with a short position of Assurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Insurance and Assurant.
Diversification Opportunities for Aspen Insurance and Assurant
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aspen and Assurant is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Insurance Holdings and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant and Aspen 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 Aspen Insurance Holdings 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 Aspen Insurance i.e., Aspen Insurance and Assurant go up and down completely randomly.
Pair Corralation between Aspen Insurance and Assurant
Assuming the 90 days trading horizon Aspen Insurance is expected to generate 3.08 times less return on investment than Assurant. But when comparing it to its historical volatility, Aspen Insurance Holdings is 1.04 times less risky than Assurant. It trades about 0.03 of its potential returns per unit of risk. Assurant is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 12,886 in Assurant on August 27, 2024 and sell it today you would earn a total of 9,729 from holding Assurant or generate 75.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspen Insurance Holdings vs. Assurant
Performance |
| Timeline |
| Aspen Insurance Holdings |
| Assurant |
Aspen Insurance and Assurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Insurance and Assurant
The main advantage of trading using opposite Aspen Insurance and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen 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.| Aspen Insurance vs. Aspen Insurance Holdings | Aspen Insurance vs. Selective Insurance Group | Aspen Insurance vs. The Allstate | Aspen Insurance vs. AmTrust Financial Services |
| Assurant vs. Assured Guaranty | Assurant vs. Ambac Financial Group | Assurant vs. AMERISAFE | Assurant vs. Enact Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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