Correlation Between Aspen Insurance and Oxbridge
Can any of the company-specific risk be diversified away by investing in both Aspen Insurance and Oxbridge 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 Oxbridge 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 Oxbridge Re Holdings, you can compare the effects of market volatilities on Aspen Insurance and Oxbridge 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 Oxbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Insurance and Oxbridge.
Diversification Opportunities for Aspen Insurance and Oxbridge
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aspen and Oxbridge is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Insurance Holdings and Oxbridge Re Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxbridge Re 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 Oxbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxbridge Re Holdings has no effect on the direction of Aspen Insurance i.e., Aspen Insurance and Oxbridge go up and down completely randomly.
Pair Corralation between Aspen Insurance and Oxbridge
Assuming the 90 days trading horizon Aspen Insurance is expected to generate 340.4 times less return on investment than Oxbridge. But when comparing it to its historical volatility, Aspen Insurance Holdings is 132.55 times less risky than Oxbridge. It trades about 0.06 of its potential returns per unit of risk. Oxbridge Re Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Oxbridge Re Holdings on August 30, 2024 and sell it today you would earn a total of 6.99 from holding Oxbridge Re Holdings or generate 46.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.49% |
| Values | Daily Returns |
Aspen Insurance Holdings vs. Oxbridge Re Holdings
Performance |
| Timeline |
| Aspen Insurance Holdings |
| Oxbridge Re Holdings |
Aspen Insurance and Oxbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Insurance and Oxbridge
The main advantage of trading using opposite Aspen Insurance and Oxbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Insurance position performs unexpectedly, Oxbridge 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 Oxbridge will offset losses from the drop in Oxbridge'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 |
| Oxbridge vs. Maiden Holdings | Oxbridge vs. Greenlight Capital Re | Oxbridge vs. RenaissanceRe Holdings | Oxbridge vs. Renaissancere Holdings |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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