Correlation Between Associated Capital and SiriusPoint
Can any of the company-specific risk be diversified away by investing in both Associated Capital and SiriusPoint 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 Associated Capital and SiriusPoint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and SiriusPoint, you can compare the effects of market volatilities on Associated Capital and SiriusPoint 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 Associated Capital with a short position of SiriusPoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and SiriusPoint.
Diversification Opportunities for Associated Capital and SiriusPoint
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Associated and SiriusPoint is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and SiriusPoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SiriusPoint and Associated Capital 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 Associated Capital Group are associated (or correlated) with SiriusPoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SiriusPoint has no effect on the direction of Associated Capital i.e., Associated Capital and SiriusPoint go up and down completely randomly.
Pair Corralation between Associated Capital and SiriusPoint
Allowing for the 90-day total investment horizon Associated Capital Group is expected to under-perform the SiriusPoint. In addition to that, Associated Capital is 2.12 times more volatile than SiriusPoint. It trades about 0.0 of its total potential returns per unit of risk. SiriusPoint is currently generating about 0.06 per unit of volatility. If you would invest 2,050 in SiriusPoint on August 30, 2024 and sell it today you would earn a total of 488.00 from holding SiriusPoint or generate 23.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. SiriusPoint
Performance |
| Timeline |
| Associated Capital |
| SiriusPoint |
Associated Capital and SiriusPoint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and SiriusPoint
The main advantage of trading using opposite Associated Capital and SiriusPoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, SiriusPoint 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 SiriusPoint will offset losses from the drop in SiriusPoint's long position.| Associated Capital vs. TPG Inc | Associated Capital vs. Carlyle Secured Lending | Associated Capital vs. Brookfield Corp |
| SiriusPoint vs. RLJ Lodging Trust | SiriusPoint vs. Argo Group International | SiriusPoint vs. New York Mortgage | SiriusPoint vs. HUMANA INC |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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