Correlation Between Saia and Aspen Insurance

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

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

Diversification Opportunities for Saia and Aspen Insurance

0.41

Correlation Coefficient

Saia  Aspen Insurance

Very weak diversification

The 3 months correlation between Saia and Aspen is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Saia 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 Saia 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 Saia 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 Saia i.e., Saia and Aspen Insurance go up and down completely randomly.

Pair Corralation between Saia and Aspen Insurance

Given the investment horizon of 90 days Saia Inc is expected to under-perform the Aspen Insurance. In addition to that, Saia is 2.92 times more volatile than Aspen Insurance Holdings. It trades about -0.1 of its total potential returns per unit of risk. Aspen Insurance Holdings is currently generating about 0.03 per unit of volatility. If you would invest  1,980  in Aspen Insurance Holdings on December 28, 2024 and sell it today you would earn a total of  32.00  from holding Aspen Insurance Holdings or generate 1.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Saia Inc  vs.  Aspen Insurance Holdings

Saia Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Saia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Aspen Insurance Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aspen Insurance Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Saia and Aspen Insurance

The main advantage of trading using opposite Saia and Aspen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saia 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 Saia Inc 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.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.