Correlation Between INTNED and Aspen Insurance

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

By analyzing existing cross correlation between INTNED 14 01 JUL 26 and Aspen Insurance Holdings, you can compare the effects of market volatilities on INTNED 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 INTNED with a short position of Aspen Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTNED and Aspen Insurance.

Diversification Opportunities for INTNED and Aspen Insurance

0.23

Correlation Coefficient

INTNED  Aspen Insurance

Modest diversification

The 3 months correlation between INTNED and Aspen is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding INTNED 14 01 JUL 26 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 INTNED 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 INTNED 14 01 JUL 26 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 INTNED i.e., INTNED and Aspen Insurance go up and down completely randomly.

Pair Corralation between INTNED and Aspen Insurance

Assuming the 90 days trading horizon INTNED 14 01 JUL 26 is expected to under-perform the Aspen Insurance. But the bond apears to be less risky and, when comparing its historical volatility, INTNED 14 01 JUL 26 is 1.3 times less risky than Aspen Insurance. The bond trades about -0.24 of its potential returns per unit of risk. The Aspen Insurance Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,036  in Aspen Insurance Holdings on September 21, 2024 and sell it today you would earn a total of  29.00  from holding Aspen Insurance Holdings or generate 1.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	59.09%
Values	Daily Returns

INTNED 14 01 JUL 26  vs.  Aspen Insurance Holdings

INTNED 14 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTNED 14 01 JUL 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INTNED is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with INTNED and Aspen Insurance

The main advantage of trading using opposite INTNED and Aspen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTNED 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 INTNED 14 01 JUL 26 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.