Correlation Between Black Hills and Siriuspoint
Can any of the company-specific risk be diversified away by investing in both Black Hills 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 Black Hills and Siriuspoint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Hills and Siriuspoint, you can compare the effects of market volatilities on Black Hills 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 Black Hills with a short position of Siriuspoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Hills and Siriuspoint.
Diversification Opportunities for Black Hills and Siriuspoint
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Black and Siriuspoint is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Black Hills and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint and Black Hills 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 Black Hills 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 Black Hills i.e., Black Hills and Siriuspoint go up and down completely randomly.
Pair Corralation between Black Hills and Siriuspoint
Considering the 90-day investment horizon Black Hills is expected to generate 1.84 times less return on investment than Siriuspoint. But when comparing it to its historical volatility, Black Hills is 1.87 times less risky than Siriuspoint. It trades about 0.24 of its potential returns per unit of risk. Siriuspoint is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,351 in Siriuspoint on August 30, 2024 and sell it today you would earn a total of 194.00 from holding Siriuspoint or generate 14.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Hills vs. Siriuspoint
Performance |
| Timeline |
| Black Hills |
| Siriuspoint |
Black Hills and Siriuspoint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Hills and Siriuspoint
The main advantage of trading using opposite Black Hills and Siriuspoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Hills 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.| Black Hills vs. NorthWestern | Black Hills vs. Avista | Black Hills vs. Otter Tail | Black Hills vs. Companhia Paranaense de |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Stocks Directory Find actively traded stocks across global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |