Correlation Between Allient and Siriuspoint
Can any of the company-specific risk be diversified away by investing in both Allient 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 Allient and Siriuspoint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allient and Siriuspoint, you can compare the effects of market volatilities on Allient 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 Allient with a short position of Siriuspoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and Siriuspoint.
Diversification Opportunities for Allient and Siriuspoint
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allient and Siriuspoint is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Allient and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint and Allient 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 Allient 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 Allient i.e., Allient and Siriuspoint go up and down completely randomly.
Pair Corralation between Allient and Siriuspoint
Given the investment horizon of 90 days Allient is expected to generate 1.06 times more return on investment than Siriuspoint. However, Allient is 1.06 times more volatile than Siriuspoint. It trades about 0.52 of its potential returns per unit of risk. Siriuspoint is currently generating about 0.26 per unit of risk. If you would invest 1,789 in Allient on August 26, 2024 and sell it today you would earn a total of 668.00 from holding Allient or generate 37.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allient vs. Siriuspoint
Performance |
| Timeline |
| Allient |
| Siriuspoint |
Allient and Siriuspoint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allient and Siriuspoint
The main advantage of trading using opposite Allient and Siriuspoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient 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.The idea behind Allient and Siriuspoint 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.| Siriuspoint vs. Maiden Holdings | Siriuspoint vs. Reinsurance Group of | Siriuspoint vs. Oxbridge Re Holdings | Siriuspoint vs. Greenlight Capital Re |
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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