Correlation Between Lion One and Aspen Insurance
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Aspen Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Aspen Insurance Holdings, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Aspen Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Aspen Insurance.
Diversification Opportunities for Lion One and Aspen Insurance
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lion and Aspen is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals 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 Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and Aspen Insurance go up and down completely randomly.
Pair Corralation between Lion One and Aspen Insurance
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Aspen Insurance. In addition to that, Lion One is 1.75 times more volatile than Aspen Insurance Holdings. It trades about -0.19 of its total potential returns per unit of risk. Aspen Insurance Holdings is currently generating about 0.2 per unit of volatility. If you would invest 2,060 in Aspen Insurance Holdings on September 1, 2024 and sell it today you would earn a total of 148.00 from holding Aspen Insurance Holdings or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Aspen Insurance Holdings
Performance |
| Timeline |
| Lion One Metals |
| Aspen Insurance Holdings |
Lion One and Aspen Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Aspen Insurance
The main advantage of trading using opposite Lion One and Aspen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. Irving Resources | Lion One vs. Headwater Gold | Lion One vs. Novo Resources Corp | Lion One vs. Snowline Gold Corp |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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