Correlation Between Aspen Insurance and Luduson G
Can any of the company-specific risk be diversified away by investing in both Aspen Insurance and Luduson G 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 Luduson G 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 Luduson G, you can compare the effects of market volatilities on Aspen Insurance and Luduson G 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 Luduson G. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Insurance and Luduson G.
Diversification Opportunities for Aspen Insurance and Luduson G
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aspen and Luduson is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Insurance Holdings and Luduson G in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luduson G 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 Luduson G. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luduson G has no effect on the direction of Aspen Insurance i.e., Aspen Insurance and Luduson G go up and down completely randomly.
Pair Corralation between Aspen Insurance and Luduson G
Assuming the 90 days trading horizon Aspen Insurance Holdings is expected to generate 0.09 times more return on investment than Luduson G. However, Aspen Insurance Holdings is 11.51 times less risky than Luduson G. It trades about 0.18 of its potential returns per unit of risk. Luduson G is currently generating about -0.09 per unit of risk. If you would invest 2,075 in Aspen Insurance Holdings on September 2, 2024 and sell it today you would earn a total of 133.00 from holding Aspen Insurance Holdings or generate 6.41% 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. Luduson G
Performance |
| Timeline |
| Aspen Insurance Holdings |
| Luduson G |
Aspen Insurance and Luduson G Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Insurance and Luduson G
The main advantage of trading using opposite Aspen Insurance and Luduson G positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Insurance position performs unexpectedly, Luduson G 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 Luduson G will offset losses from the drop in Luduson G'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 |
| Luduson G vs. Sphere Entertainment Co | Luduson G vs. NRG Energy | Luduson G vs. Canlan Ice Sports | Luduson G vs. PGE Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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