Correlation Between Equitable Holdings and Aspen Insurance
Can any of the company-specific risk be diversified away by investing in both Equitable Holdings 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 Equitable Holdings and Aspen Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equitable Holdings and Aspen Insurance Holdings, you can compare the effects of market volatilities on Equitable Holdings 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 Equitable Holdings with a short position of Aspen Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equitable Holdings and Aspen Insurance.
Diversification Opportunities for Equitable Holdings and Aspen Insurance
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Equitable and Aspen is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Equitable Holdings 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 Equitable Holdings 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 Equitable Holdings 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 Equitable Holdings i.e., Equitable Holdings and Aspen Insurance go up and down completely randomly.
Pair Corralation between Equitable Holdings and Aspen Insurance
Assuming the 90 days trading horizon Equitable Holdings is expected to generate 0.5 times more return on investment than Aspen Insurance. However, Equitable Holdings is 2.0 times less risky than Aspen Insurance. It trades about -0.12 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 2,279 in Equitable Holdings on August 31, 2024 and sell it today you would lose (47.00) from holding Equitable Holdings or give up 2.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equitable Holdings vs. Aspen Insurance Holdings
Performance |
| Timeline |
| Equitable Holdings |
| Aspen Insurance Holdings |
Equitable Holdings and Aspen Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equitable Holdings and Aspen Insurance
The main advantage of trading using opposite Equitable Holdings and Aspen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equitable Holdings 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.| Equitable Holdings vs. Capital One Financial | Equitable Holdings vs. Citizens Financial Group | Equitable Holdings vs. Equitable Holdings | Equitable Holdings vs. MetLife Preferred Stock |
| Aspen Insurance vs. Aspen Insurance Holdings | Aspen Insurance vs. Aspen Insurance Holdings | Aspen Insurance vs. AXIS Capital Holdings | Aspen Insurance vs. Athene Holding |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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