Correlation Between Encore Capital and Siriuspoint
Can any of the company-specific risk be diversified away by investing in both Encore 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 Encore Capital and Siriuspoint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Encore Capital Group and Siriuspoint, you can compare the effects of market volatilities on Encore 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 Encore Capital with a short position of Siriuspoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encore Capital and Siriuspoint.
Diversification Opportunities for Encore Capital and Siriuspoint
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Encore and Siriuspoint is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Encore Capital Group and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint and Encore 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 Encore 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 Encore Capital i.e., Encore Capital and Siriuspoint go up and down completely randomly.
Pair Corralation between Encore Capital and Siriuspoint
Given the investment horizon of 90 days Encore Capital is expected to generate 2.42 times less return on investment than Siriuspoint. In addition to that, Encore Capital is 1.28 times more volatile than Siriuspoint. It trades about 0.03 of its total potential returns per unit of risk. Siriuspoint is currently generating about 0.1 per unit of volatility. If you would invest 1,045 in Siriuspoint on August 24, 2024 and sell it today you would earn a total of 510.50 from holding Siriuspoint or generate 48.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Encore Capital Group vs. Siriuspoint
Performance |
| Timeline |
| Encore Capital Group |
| Siriuspoint |
Encore Capital and Siriuspoint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Encore Capital and Siriuspoint
The main advantage of trading using opposite Encore Capital and Siriuspoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encore 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.| Encore Capital vs. Guild Holdings Co | Encore Capital vs. Mr Cooper Group | Encore Capital vs. CNFinance Holdings | Encore Capital vs. Security National Financial |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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