Correlation Between Aspen Insurance and Kinsale Capital
Can any of the company-specific risk be diversified away by investing in both Aspen Insurance and Kinsale Capital 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 Kinsale Capital 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 Kinsale Capital Group, you can compare the effects of market volatilities on Aspen Insurance and Kinsale Capital 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 Kinsale Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Insurance and Kinsale Capital.
Diversification Opportunities for Aspen Insurance and Kinsale Capital
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aspen and Kinsale is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Insurance Holdings and Kinsale Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinsale Capital Group 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 Kinsale Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinsale Capital Group has no effect on the direction of Aspen Insurance i.e., Aspen Insurance and Kinsale Capital go up and down completely randomly.
Pair Corralation between Aspen Insurance and Kinsale Capital
Assuming the 90 days trading horizon Aspen Insurance is expected to generate 2.85 times less return on investment than Kinsale Capital. But when comparing it to its historical volatility, Aspen Insurance Holdings is 1.68 times less risky than Kinsale Capital. It trades about 0.03 of its potential returns per unit of risk. Kinsale Capital Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 28,848 in Kinsale Capital Group on August 24, 2024 and sell it today you would earn a total of 21,021 from holding Kinsale Capital Group or generate 72.87% 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. Kinsale Capital Group
Performance |
| Timeline |
| Aspen Insurance Holdings |
| Kinsale Capital Group |
Aspen Insurance and Kinsale Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Insurance and Kinsale Capital
The main advantage of trading using opposite Aspen Insurance and Kinsale Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Insurance position performs unexpectedly, Kinsale Capital 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 Kinsale Capital will offset losses from the drop in Kinsale Capital'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 |
| Kinsale Capital vs. Selective Insurance Group | Kinsale Capital vs. Horace Mann Educators | Kinsale Capital vs. Kemper | Kinsale Capital vs. ProAssurance |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |