Correlation Between Aspen Insurance and Celsius Holdings
Can any of the company-specific risk be diversified away by investing in both Aspen Insurance and Celsius Holdings 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 Celsius Holdings 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 Celsius Holdings, you can compare the effects of market volatilities on Aspen Insurance and Celsius Holdings 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 Celsius Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Insurance and Celsius Holdings.
Diversification Opportunities for Aspen Insurance and Celsius Holdings
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aspen and Celsius is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Insurance Holdings and Celsius Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celsius Holdings 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 Celsius Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celsius Holdings has no effect on the direction of Aspen Insurance i.e., Aspen Insurance and Celsius Holdings go up and down completely randomly.
Pair Corralation between Aspen Insurance and Celsius Holdings
Assuming the 90 days trading horizon Aspen Insurance Holdings is expected to generate 0.49 times more return on investment than Celsius Holdings. However, Aspen Insurance Holdings is 2.02 times less risky than Celsius Holdings. It trades about 0.2 of its potential returns per unit of risk. Celsius Holdings is currently generating about -0.06 per unit of risk. If you would invest 2,060 in Aspen Insurance Holdings on September 1, 2024 and sell it today you would earn a total of 148.00 from holding Aspen Insurance Holdings or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspen Insurance Holdings vs. Celsius Holdings
Performance |
| Timeline |
| Aspen Insurance Holdings |
| Celsius Holdings |
Aspen Insurance and Celsius Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Insurance and Celsius Holdings
The main advantage of trading using opposite Aspen Insurance and Celsius Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Insurance position performs unexpectedly, Celsius Holdings 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 Celsius Holdings will offset losses from the drop in Celsius Holdings' 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 |
| Celsius Holdings vs. Vita Coco | Celsius Holdings vs. Keurig Dr Pepper | Celsius Holdings vs. PepsiCo | Celsius Holdings vs. Coca Cola Femsa SAB |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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