Correlation Between Aspen Insurance and Maiden Holdings
Can any of the company-specific risk be diversified away by investing in both Aspen Insurance and Maiden 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 Maiden 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 Maiden Holdings, you can compare the effects of market volatilities on Aspen Insurance and Maiden 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 Maiden Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Insurance and Maiden Holdings.
Diversification Opportunities for Aspen Insurance and Maiden Holdings
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aspen and Maiden is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Insurance Holdings and Maiden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maiden 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 Maiden Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maiden Holdings has no effect on the direction of Aspen Insurance i.e., Aspen Insurance and Maiden Holdings go up and down completely randomly.
Pair Corralation between Aspen Insurance and Maiden Holdings
Assuming the 90 days trading horizon Aspen Insurance is expected to generate 1.24 times less return on investment than Maiden Holdings. But when comparing it to its historical volatility, Aspen Insurance Holdings is 1.78 times less risky than Maiden Holdings. It trades about 0.03 of its potential returns per unit of risk. Maiden Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,460 in Maiden Holdings on August 28, 2024 and sell it today you would earn a total of 201.00 from holding Maiden Holdings or generate 13.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.69% |
| Values | Daily Returns |
Aspen Insurance Holdings vs. Maiden Holdings
Performance |
| Timeline |
| Aspen Insurance Holdings |
| Maiden Holdings |
Aspen Insurance and Maiden Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Insurance and Maiden Holdings
The main advantage of trading using opposite Aspen Insurance and Maiden Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Insurance position performs unexpectedly, Maiden 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 Maiden Holdings will offset losses from the drop in Maiden 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 |
| Maiden Holdings vs. Maiden Holdings North | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Entergy Arkansas LLC | Maiden Holdings vs. Entergy New Orleans |
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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