Correlation Between Aspen Insurance and Mader Group

Can any of the company-specific risk be diversified away by investing in both Aspen Insurance and Mader Group 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 Mader Group 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 Mader Group Limited, you can compare the effects of market volatilities on Aspen Insurance and Mader Group 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 Mader Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Insurance and Mader Group.

Diversification Opportunities for Aspen Insurance and Mader Group

-0.24

Correlation Coefficient

Aspen Insurance  Mader Group

Very good diversification

The 3 months correlation between Aspen and Mader is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Insurance Holdings and Mader Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mader Group Limited 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 Mader Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mader Group Limited has no effect on the direction of Aspen Insurance i.e., Aspen Insurance and Mader Group go up and down completely randomly.

Pair Corralation between Aspen Insurance and Mader Group

If you would invest  1,667  in Aspen Insurance Holdings on September 12, 2024 and sell it today you would earn a total of  520.00  from holding Aspen Insurance Holdings or generate 31.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.7%
Values	Daily Returns

Aspen Insurance Holdings  vs.  Mader Group Limited

Aspen Insurance Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aspen Insurance Holdings are ranked lower than 1 (%) 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.

Mader Group Limited

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mader Group Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Mader Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aspen Insurance and Mader Group

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

The idea behind Aspen Insurance Holdings and Mader Group Limited 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.