Correlation Between Aspen Insurance and Sphere Entertainment
Can any of the company-specific risk be diversified away by investing in both Aspen Insurance and Sphere Entertainment 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 Sphere Entertainment 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 Sphere Entertainment Co, you can compare the effects of market volatilities on Aspen Insurance and Sphere Entertainment 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 Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Insurance and Sphere Entertainment.
Diversification Opportunities for Aspen Insurance and Sphere Entertainment
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aspen and Sphere is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Insurance Holdings and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment 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 Sphere Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sphere Entertainment has no effect on the direction of Aspen Insurance i.e., Aspen Insurance and Sphere Entertainment go up and down completely randomly.
Pair Corralation between Aspen Insurance and Sphere Entertainment
Assuming the 90 days trading horizon Aspen Insurance Holdings is expected to generate 0.44 times more return on investment than Sphere Entertainment. However, Aspen Insurance Holdings is 2.3 times less risky than Sphere Entertainment. It trades about 0.09 of its potential returns per unit of risk. Sphere Entertainment Co is currently generating about -0.03 per unit of risk. If you would invest 2,068 in Aspen Insurance Holdings on September 2, 2024 and sell it today you would earn a total of 140.00 from holding Aspen Insurance Holdings or generate 6.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspen Insurance Holdings vs. Sphere Entertainment Co
Performance |
| Timeline |
| Aspen Insurance Holdings |
| Sphere Entertainment |
Aspen Insurance and Sphere Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Insurance and Sphere Entertainment
The main advantage of trading using opposite Aspen Insurance and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Insurance position performs unexpectedly, Sphere Entertainment 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 Sphere Entertainment will offset losses from the drop in Sphere Entertainment'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 |
| Sphere Entertainment vs. Zane Interactive Publishing | Sphere Entertainment vs. Sable Offshore Corp | Sphere Entertainment vs. AMREP | Sphere Entertainment vs. Coursera |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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