Correlation Between Xiabuxiabu Catering and Aspen Insurance

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

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

Diversification Opportunities for Xiabuxiabu Catering and Aspen Insurance

0.08

Correlation Coefficient

Xiabuxiabu Catering  Aspen Insurance

Significant diversification

The 3 months correlation between Xiabuxiabu and Aspen is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Xiabuxiabu Catering Management 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 Xiabuxiabu Catering 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 Xiabuxiabu Catering Management 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 Xiabuxiabu Catering i.e., Xiabuxiabu Catering and Aspen Insurance go up and down completely randomly.

Pair Corralation between Xiabuxiabu Catering and Aspen Insurance

Assuming the 90 days horizon Xiabuxiabu Catering Management is expected to under-perform the Aspen Insurance. But the pink sheet apears to be less risky and, when comparing its historical volatility, Xiabuxiabu Catering Management is 1.47 times less risky than Aspen Insurance. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Aspen Insurance Holdings is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,179  in Aspen Insurance Holdings on September 14, 2024 and sell it today you would lose (19.00) from holding Aspen Insurance Holdings or give up 0.87% of portfolio value over 90 days.

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

Xiabuxiabu Catering Management  vs.  Aspen Insurance Holdings

Xiabuxiabu Catering

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xiabuxiabu Catering Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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 Xiabuxiabu Catering and Aspen Insurance

The main advantage of trading using opposite Xiabuxiabu Catering and Aspen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiabuxiabu Catering 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 Xiabuxiabu Catering Management 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.