Correlation Between Admiral Group and Aspen Insurance
Can any of the company-specific risk be diversified away by investing in both Admiral Group and Aspen Insurance 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 Admiral Group and Aspen Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Admiral Group plc and Aspen Insurance Holdings, you can compare the effects of market volatilities on Admiral Group and Aspen Insurance 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 Admiral Group with a short position of Aspen Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Admiral Group and Aspen Insurance.
Diversification Opportunities for Admiral Group and Aspen Insurance
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Admiral and Aspen is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Admiral Group plc and Aspen Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Insurance Holdings and Admiral Group 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 Admiral Group plc are associated (or correlated) with Aspen Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Insurance Holdings has no effect on the direction of Admiral Group i.e., Admiral Group and Aspen Insurance go up and down completely randomly.
Pair Corralation between Admiral Group and Aspen Insurance
Assuming the 90 days horizon Admiral Group plc is expected to generate 1.51 times more return on investment than Aspen Insurance. However, Admiral Group is 1.51 times more volatile than Aspen Insurance Holdings. It trades about 0.3 of its potential returns per unit of risk. Aspen Insurance Holdings is currently generating about 0.02 per unit of risk. If you would invest 3,265 in Admiral Group plc on December 1, 2024 and sell it today you would earn a total of 224.00 from holding Admiral Group plc or generate 6.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Admiral Group plc vs. Aspen Insurance Holdings
Performance |
| Timeline |
| Admiral Group plc |
| Aspen Insurance Holdings |
Admiral Group and Aspen Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Admiral Group and Aspen Insurance
The main advantage of trading using opposite Admiral Group and Aspen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Admiral Group position performs unexpectedly, Aspen Insurance 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 Aspen Insurance will offset losses from the drop in Aspen Insurance's long position.| Admiral Group vs. Aspen Insurance Holdings | Admiral Group vs. AmTrust Financial Services | Admiral Group vs. AmTrust Financial Services | Admiral Group vs. AmTrust Financial Services |
| Aspen Insurance vs. Aspen Insurance Holdings | Aspen Insurance vs. AXIS Capital Holdings | Aspen Insurance vs. Athene Holding | Aspen Insurance vs. The Allstate |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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