Correlation Between Greenlight Capital and Aspen Insurance
Can any of the company-specific risk be diversified away by investing in both Greenlight Capital 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 Greenlight Capital and Aspen Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenlight Capital Re and Aspen Insurance Holdings, you can compare the effects of market volatilities on Greenlight Capital 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 Greenlight Capital with a short position of Aspen Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenlight Capital and Aspen Insurance.
Diversification Opportunities for Greenlight Capital and Aspen Insurance
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Greenlight and Aspen is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Greenlight Capital Re 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 Greenlight Capital 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 Greenlight Capital Re 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 Greenlight Capital i.e., Greenlight Capital and Aspen Insurance go up and down completely randomly.
Pair Corralation between Greenlight Capital and Aspen Insurance
Given the investment horizon of 90 days Greenlight Capital Re is expected to generate 1.46 times more return on investment than Aspen Insurance. However, Greenlight Capital is 1.46 times more volatile than Aspen Insurance Holdings. It trades about 0.07 of its potential returns per unit of risk. Aspen Insurance Holdings is currently generating about 0.06 per unit of risk. If you would invest 1,397 in Greenlight Capital Re on August 30, 2024 and sell it today you would earn a total of 96.00 from holding Greenlight Capital Re or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenlight Capital Re vs. Aspen Insurance Holdings
Performance |
| Timeline |
| Greenlight Capital |
| Aspen Insurance Holdings |
Greenlight Capital and Aspen Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenlight Capital and Aspen Insurance
The main advantage of trading using opposite Greenlight Capital and Aspen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenlight Capital 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.| Greenlight Capital vs. Reinsurance Group of | Greenlight Capital vs. Siriuspoint | Greenlight Capital vs. SCOR PK | Greenlight Capital vs. SiriusPoint |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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