Correlation Between Compass Diversified and SiriusPoint
Can any of the company-specific risk be diversified away by investing in both Compass Diversified 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 Compass Diversified and SiriusPoint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compass Diversified and SiriusPoint, you can compare the effects of market volatilities on Compass Diversified 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 Compass Diversified with a short position of SiriusPoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Diversified and SiriusPoint.
Diversification Opportunities for Compass Diversified and SiriusPoint
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Compass and SiriusPoint is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Compass Diversified and SiriusPoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SiriusPoint and Compass Diversified 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 Compass Diversified 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 Compass Diversified i.e., Compass Diversified and SiriusPoint go up and down completely randomly.
Pair Corralation between Compass Diversified and SiriusPoint
Assuming the 90 days trading horizon Compass Diversified is expected to generate 1.5 times less return on investment than SiriusPoint. In addition to that, Compass Diversified is 1.05 times more volatile than SiriusPoint. It trades about 0.04 of its total potential returns per unit of risk. SiriusPoint is currently generating about 0.06 per unit of volatility. If you would invest 2,048 in SiriusPoint on August 27, 2024 and sell it today you would earn a total of 475.00 from holding SiriusPoint or generate 23.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compass Diversified vs. SiriusPoint
Performance |
| Timeline |
| Compass Diversified |
| SiriusPoint |
Compass Diversified and SiriusPoint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Diversified and SiriusPoint
The main advantage of trading using opposite Compass Diversified and SiriusPoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Diversified 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.| Compass Diversified vs. Steel Partners Holdings | Compass Diversified vs. Steel Partners Holdings | Compass Diversified vs. Tejon Ranch Co | Compass Diversified vs. Brookfield Business Partners |
| SiriusPoint vs. RLJ Lodging Trust | SiriusPoint vs. Argo Group International | SiriusPoint vs. New York Mortgage | SiriusPoint vs. Aquagold International |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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