Correlation Between Oxbridge and Aspen Insurance
Can any of the company-specific risk be diversified away by investing in both Oxbridge 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 Oxbridge and Aspen Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxbridge Re Holdings and Aspen Insurance Holdings, you can compare the effects of market volatilities on Oxbridge 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 Oxbridge with a short position of Aspen Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxbridge and Aspen Insurance.
Diversification Opportunities for Oxbridge and Aspen Insurance
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oxbridge and Aspen is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Oxbridge Re 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 Oxbridge 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 Oxbridge Re 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 Oxbridge i.e., Oxbridge and Aspen Insurance go up and down completely randomly.
Pair Corralation between Oxbridge and Aspen Insurance
Assuming the 90 days horizon Oxbridge Re Holdings is expected to generate 11.96 times more return on investment than Aspen Insurance. However, Oxbridge is 11.96 times more volatile than Aspen Insurance Holdings. It trades about 0.19 of its potential returns per unit of risk. Aspen Insurance Holdings is currently generating about 0.04 per unit of risk. If you would invest 42.00 in Oxbridge Re Holdings on October 24, 2024 and sell it today you would earn a total of 15.00 from holding Oxbridge Re Holdings or generate 35.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 83.33% |
| Values | Daily Returns |
Oxbridge Re Holdings vs. Aspen Insurance Holdings
Performance |
| Timeline |
| Oxbridge Re Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Aspen Insurance Holdings |
Oxbridge and Aspen Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxbridge and Aspen Insurance
The main advantage of trading using opposite Oxbridge and Aspen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxbridge 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.The idea behind Oxbridge Re Holdings and Aspen Insurance Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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