Correlation Between Paramount Global and Sirius XM
Can any of the company-specific risk be diversified away by investing in both Paramount Global and Sirius XM 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 Paramount Global and Sirius XM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paramount Global Class and Sirius XM Holding, you can compare the effects of market volatilities on Paramount Global and Sirius XM 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 Paramount Global with a short position of Sirius XM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paramount Global and Sirius XM.
Diversification Opportunities for Paramount Global and Sirius XM
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Paramount and Sirius is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Paramount Global Class and Sirius XM Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sirius XM Holding and Paramount Global 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 Paramount Global Class are associated (or correlated) with Sirius XM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sirius XM Holding has no effect on the direction of Paramount Global i.e., Paramount Global and Sirius XM go up and down completely randomly.
Pair Corralation between Paramount Global and Sirius XM
Given the investment horizon of 90 days Paramount Global Class is expected to generate 0.97 times more return on investment than Sirius XM. However, Paramount Global Class is 1.03 times less risky than Sirius XM. It trades about -0.01 of its potential returns per unit of risk. Sirius XM Holding is currently generating about -0.09 per unit of risk. If you would invest 1,312 in Paramount Global Class on October 20, 2024 and sell it today you would lose (285.00) from holding Paramount Global Class or give up 21.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paramount Global Class vs. Sirius XM Holding
Performance |
| Timeline |
| Paramount Global Class |
| Sirius XM Holding |
Paramount Global and Sirius XM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paramount Global and Sirius XM
The main advantage of trading using opposite Paramount Global and Sirius XM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paramount Global position performs unexpectedly, Sirius XM 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 Sirius XM will offset losses from the drop in Sirius XM's long position.| Paramount Global vs. Walt Disney | Paramount Global vs. Roku Inc | Paramount Global vs. Netflix | Paramount Global vs. AMC Entertainment Holdings |
| Sirius XM vs. Paramount Global Class | Sirius XM vs. Walt Disney | Sirius XM vs. Roku Inc | Sirius XM vs. Netflix |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |