Correlation Between Air Transport and Aspen Insurance
Can any of the company-specific risk be diversified away by investing in both Air Transport 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 Air Transport and Aspen Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Transport Services and Aspen Insurance Holdings, you can compare the effects of market volatilities on Air Transport 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 Air Transport with a short position of Aspen Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Aspen Insurance.
Diversification Opportunities for Air Transport and Aspen Insurance
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Air and Aspen is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services 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 Air Transport 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 Air Transport Services 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 Air Transport i.e., Air Transport and Aspen Insurance go up and down completely randomly.
Pair Corralation between Air Transport and Aspen Insurance
Given the investment horizon of 90 days Air Transport Services is expected to generate 3.37 times more return on investment than Aspen Insurance. However, Air Transport is 3.37 times more volatile than Aspen Insurance Holdings. It trades about 0.22 of its potential returns per unit of risk. Aspen Insurance Holdings is currently generating about 0.07 per unit of risk. If you would invest 1,729 in Air Transport Services on August 31, 2024 and sell it today you would earn a total of 470.00 from holding Air Transport Services or generate 27.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. Aspen Insurance Holdings
Performance |
| Timeline |
| Air Transport Services |
| Aspen Insurance Holdings |
Air Transport and Aspen Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Aspen Insurance
The main advantage of trading using opposite Air Transport and Aspen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport 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.| Air Transport vs. Copa Holdings SA | Air Transport vs. SkyWest | Air Transport vs. Sun Country Airlines | Air Transport vs. Frontier Group Holdings |
| Aspen Insurance vs. Aspen Insurance Holdings | Aspen Insurance vs. Selective Insurance Group | Aspen Insurance vs. The Allstate | Aspen Insurance vs. AmTrust Financial Services |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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