Correlation Between Aspen Insurance and Wabash National
Can any of the company-specific risk be diversified away by investing in both Aspen Insurance and Wabash National 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 Wabash National 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 Wabash National, you can compare the effects of market volatilities on Aspen Insurance and Wabash National 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 Wabash National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Insurance and Wabash National.
Diversification Opportunities for Aspen Insurance and Wabash National
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aspen and Wabash is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Insurance Holdings and Wabash National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wabash National 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 Wabash National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wabash National has no effect on the direction of Aspen Insurance i.e., Aspen Insurance and Wabash National go up and down completely randomly.
Pair Corralation between Aspen Insurance and Wabash National
Assuming the 90 days trading horizon Aspen Insurance is expected to generate 2.87 times less return on investment than Wabash National. But when comparing it to its historical volatility, Aspen Insurance Holdings is 1.36 times less risky than Wabash National. It trades about 0.09 of its potential returns per unit of risk. Wabash National is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,849 in Wabash National on August 27, 2024 and sell it today you would earn a total of 159.00 from holding Wabash National or generate 8.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspen Insurance Holdings vs. Wabash National
Performance |
| Timeline |
| Aspen Insurance Holdings |
| Wabash National |
Aspen Insurance and Wabash National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Insurance and Wabash National
The main advantage of trading using opposite Aspen Insurance and Wabash National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Insurance position performs unexpectedly, Wabash National 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 Wabash National will offset losses from the drop in Wabash National'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 |
| Wabash National vs. Rev Group | Wabash National vs. Gencor Industries | Wabash National vs. Alamo Group | Wabash National vs. Columbus McKinnon |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |