Correlation Between BCE and Aspen Insurance
Can any of the company-specific risk be diversified away by investing in both BCE 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 BCE and Aspen Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCE Inc and Aspen Insurance Holdings, you can compare the effects of market volatilities on BCE 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 BCE with a short position of Aspen Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and Aspen Insurance.
Diversification Opportunities for BCE and Aspen Insurance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BCE and Aspen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc 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 BCE 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 BCE Inc 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 BCE i.e., BCE and Aspen Insurance go up and down completely randomly.
Pair Corralation between BCE and Aspen Insurance
Considering the 90-day investment horizon BCE Inc is expected to under-perform the Aspen Insurance. In addition to that, BCE is 1.19 times more volatile than Aspen Insurance Holdings. It trades about -0.56 of its total potential returns per unit of risk. Aspen Insurance Holdings is currently generating about -0.22 per unit of volatility. If you would invest 2,161 in Aspen Insurance Holdings on September 24, 2024 and sell it today you would lose (96.00) from holding Aspen Insurance Holdings or give up 4.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
BCE Inc vs. Aspen Insurance Holdings
Performance |
Timeline |
BCE Inc |
Aspen Insurance Holdings |
BCE and Aspen Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BCE and Aspen Insurance
The main advantage of trading using opposite BCE and Aspen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE 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.BCE vs. Grab Holdings | BCE vs. Cadence Design Systems | BCE vs. Aquagold International | BCE vs. Morningstar Unconstrained Allocation |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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