Correlation Between Loews Corp and Aspen Insurance
Can any of the company-specific risk be diversified away by investing in both Loews Corp 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 Loews Corp and Aspen Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loews Corp and Aspen Insurance Holdings, you can compare the effects of market volatilities on Loews Corp 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 Loews Corp with a short position of Aspen Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loews Corp and Aspen Insurance.
Diversification Opportunities for Loews Corp and Aspen Insurance
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Loews and Aspen is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Loews Corp 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 Loews Corp 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 Loews Corp 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 Loews Corp i.e., Loews Corp and Aspen Insurance go up and down completely randomly.
Pair Corralation between Loews Corp and Aspen Insurance
Taking into account the 90-day investment horizon Loews Corp is expected to generate 2.69 times more return on investment than Aspen Insurance. However, Loews Corp is 2.69 times more volatile than Aspen Insurance Holdings. It trades about 0.25 of its potential returns per unit of risk. Aspen Insurance Holdings is currently generating about -0.2 per unit of risk. If you would invest 7,970 in Loews Corp on August 30, 2024 and sell it today you would earn a total of 735.00 from holding Loews Corp or generate 9.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loews Corp vs. Aspen Insurance Holdings
Performance |
| Timeline |
| Loews Corp |
| Aspen Insurance Holdings |
Loews Corp and Aspen Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loews Corp and Aspen Insurance
The main advantage of trading using opposite Loews Corp and Aspen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loews Corp 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.| Loews Corp vs. Horace Mann Educators | Loews Corp vs. Global Indemnity PLC | Loews Corp vs. Selective Insurance Group | Loews Corp vs. Kemper |
| Aspen Insurance vs. The Allstate | Aspen Insurance vs. Aspen Insurance Holdings | Aspen Insurance vs. AmTrust Financial Services | Aspen Insurance vs. Argo Group International |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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