Correlation Between Eagle Pointome and Aspen Insurance
Can any of the company-specific risk be diversified away by investing in both Eagle Pointome 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 Eagle Pointome and Aspen Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Pointome and Aspen Insurance Holdings, you can compare the effects of market volatilities on Eagle Pointome 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 Eagle Pointome with a short position of Aspen Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Pointome and Aspen Insurance.
Diversification Opportunities for Eagle Pointome and Aspen Insurance
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eagle and Aspen is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Pointome 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 Eagle Pointome 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 Eagle Pointome 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 Eagle Pointome i.e., Eagle Pointome and Aspen Insurance go up and down completely randomly.
Pair Corralation between Eagle Pointome and Aspen Insurance
Given the investment horizon of 90 days Eagle Pointome is expected to generate 2.31 times less return on investment than Aspen Insurance. But when comparing it to its historical volatility, Eagle Pointome is 6.0 times less risky than Aspen Insurance. It trades about 0.11 of its potential returns per unit of risk. Aspen Insurance Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,096 in Aspen Insurance Holdings on August 24, 2024 and sell it today you would earn a total of 26.00 from holding Aspen Insurance Holdings or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Pointome vs. Aspen Insurance Holdings
Performance |
| Timeline |
| Eagle Pointome |
| Aspen Insurance Holdings |
Eagle Pointome and Aspen Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Pointome and Aspen Insurance
The main advantage of trading using opposite Eagle Pointome and Aspen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Pointome 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.| Eagle Pointome vs. Aspen Insurance Holdings | Eagle Pointome vs. Fossil Group | Eagle Pointome vs. Saia Inc | Eagle Pointome vs. Sun Country Airlines |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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