Correlation Between Aspen Insurance and Cabal Communications

Can any of the company-specific risk be diversified away by investing in both Aspen Insurance and Cabal Communications 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 Aspen Insurance and Cabal Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aspen Insurance Holdings and Cabal Communications, you can compare the effects of market volatilities on Aspen Insurance and Cabal Communications 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 Aspen Insurance with a short position of Cabal Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Insurance and Cabal Communications.

Diversification Opportunities for Aspen Insurance and Cabal Communications

0.0

Correlation Coefficient

Aspen Insurance  Cabal Communications

Pay attention - limited upside

The 3 months correlation between Aspen and Cabal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Insurance Holdings and Cabal Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabal Communications and Aspen Insurance 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 Aspen Insurance Holdings are associated (or correlated) with Cabal Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabal Communications has no effect on the direction of Aspen Insurance i.e., Aspen Insurance and Cabal Communications go up and down completely randomly.

Pair Corralation between Aspen Insurance and Cabal Communications

If you would invest  1,928  in Aspen Insurance Holdings on September 30, 2024 and sell it today you would earn a total of  76.00  from holding Aspen Insurance Holdings or generate 3.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Aspen Insurance Holdings  vs.  Cabal Communications

Aspen Insurance Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aspen Insurance Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Aspen Insurance is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Cabal Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cabal Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Cabal Communications is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Aspen Insurance and Cabal Communications

The main advantage of trading using opposite Aspen Insurance and Cabal Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Insurance position performs unexpectedly, Cabal Communications 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 Cabal Communications will offset losses from the drop in Cabal Communications' long position.

The idea behind Aspen Insurance Holdings and Cabal Communications 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.