Correlation Between Aspen Insurance and Delta Air
Can any of the company-specific risk be diversified away by investing in both Aspen Insurance and Delta Air 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 Delta Air 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 Delta Air Lines, you can compare the effects of market volatilities on Aspen Insurance and Delta Air 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 Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Insurance and Delta Air.
Diversification Opportunities for Aspen Insurance and Delta Air
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aspen and Delta is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Insurance Holdings and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines 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 Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of Aspen Insurance i.e., Aspen Insurance and Delta Air go up and down completely randomly.
Pair Corralation between Aspen Insurance and Delta Air
Assuming the 90 days trading horizon Aspen Insurance is expected to generate 3.3 times less return on investment than Delta Air. But when comparing it to its historical volatility, Aspen Insurance Holdings is 1.7 times less risky than Delta Air. It trades about 0.05 of its potential returns per unit of risk. Delta Air Lines is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,992 in Delta Air Lines on September 3, 2024 and sell it today you would earn a total of 2,349 from holding Delta Air Lines or generate 58.84% 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. Delta Air Lines
Performance |
| Timeline |
| Aspen Insurance Holdings |
| Delta Air Lines |
Aspen Insurance and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Insurance and Delta Air
The main advantage of trading using opposite Aspen Insurance and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Insurance position performs unexpectedly, Delta Air 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 Delta Air will offset losses from the drop in Delta Air'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 |
| Delta Air vs. Copa Holdings SA | Delta Air vs. SkyWest | Delta Air vs. Air Transport Services | Delta Air vs. Mesa Air Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |