Correlation Between Aspen Insurance and Norra Metals
Can any of the company-specific risk be diversified away by investing in both Aspen Insurance and Norra Metals 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 Norra Metals 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 Norra Metals Corp, you can compare the effects of market volatilities on Aspen Insurance and Norra Metals 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 Norra Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Insurance and Norra Metals.
Diversification Opportunities for Aspen Insurance and Norra Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aspen and Norra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Insurance Holdings and Norra Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norra Metals Corp 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 Norra Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norra Metals Corp has no effect on the direction of Aspen Insurance i.e., Aspen Insurance and Norra Metals go up and down completely randomly.
Pair Corralation between Aspen Insurance and Norra Metals
Assuming the 90 days trading horizon Aspen Insurance is expected to generate 86.84 times less return on investment than Norra Metals. But when comparing it to its historical volatility, Aspen Insurance Holdings is 51.03 times less risky than Norra Metals. It trades about 0.04 of its potential returns per unit of risk. Norra Metals Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1.70 in Norra Metals Corp on September 3, 2024 and sell it today you would lose (0.70) from holding Norra Metals Corp or give up 41.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspen Insurance Holdings vs. Norra Metals Corp
Performance |
| Timeline |
| Aspen Insurance Holdings |
| Norra Metals Corp |
Aspen Insurance and Norra Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Insurance and Norra Metals
The main advantage of trading using opposite Aspen Insurance and Norra Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Insurance position performs unexpectedly, Norra Metals 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 Norra Metals will offset losses from the drop in Norra Metals' 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 |
| Norra Metals vs. Aspen Insurance Holdings | Norra Metals vs. MGIC Investment Corp | Norra Metals vs. Pekin Life Insurance | Norra Metals vs. NETGEAR |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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