Correlation Between Aspen Insurance and Tokio Marine
Can any of the company-specific risk be diversified away by investing in both Aspen Insurance and Tokio Marine 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 Tokio Marine 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 Tokio Marine Holdings, you can compare the effects of market volatilities on Aspen Insurance and Tokio Marine 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 Tokio Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Insurance and Tokio Marine.
Diversification Opportunities for Aspen Insurance and Tokio Marine
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aspen and Tokio is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Insurance Holdings and Tokio Marine Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokio Marine 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 Tokio Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokio Marine Holdings has no effect on the direction of Aspen Insurance i.e., Aspen Insurance and Tokio Marine go up and down completely randomly.
Pair Corralation between Aspen Insurance and Tokio Marine
If you would invest 2,114 in Aspen Insurance Holdings on August 28, 2024 and sell it today you would earn a total of 16.00 from holding Aspen Insurance Holdings or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Aspen Insurance Holdings vs. Tokio Marine Holdings
Performance |
| Timeline |
| Aspen Insurance Holdings |
| Tokio Marine Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aspen Insurance and Tokio Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Insurance and Tokio Marine
The main advantage of trading using opposite Aspen Insurance and Tokio Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Insurance position performs unexpectedly, Tokio Marine 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 Tokio Marine will offset losses from the drop in Tokio Marine's long position.| Aspen Insurance vs. Aspen Insurance Holdings | Aspen Insurance vs. Aspen Insurance Holdings | Aspen Insurance vs. AXIS Capital Holdings | Aspen Insurance vs. Athene Holding |
| Tokio Marine vs. American Financial Group | Tokio Marine vs. Aspen Insurance Holdings | Tokio Marine vs. The Allstate | Tokio Marine vs. Aspen Insurance 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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