Correlation Between Sirius XM and Paramount Global
Can any of the company-specific risk be diversified away by investing in both Sirius XM and Paramount Global 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 Sirius XM and Paramount Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sirius XM Holding and Paramount Global Class, you can compare the effects of market volatilities on Sirius XM and Paramount Global 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 Sirius XM with a short position of Paramount Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sirius XM and Paramount Global.
Diversification Opportunities for Sirius XM and Paramount Global
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sirius and Paramount is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sirius XM Holding and Paramount Global Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Global Class and Sirius XM 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 Sirius XM Holding are associated (or correlated) with Paramount Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramount Global Class has no effect on the direction of Sirius XM i.e., Sirius XM and Paramount Global go up and down completely randomly.
Pair Corralation between Sirius XM and Paramount Global
Given the investment horizon of 90 days Sirius XM Holding is expected to under-perform the Paramount Global. In addition to that, Sirius XM is 1.1 times more volatile than Paramount Global Class. It trades about -0.03 of its total potential returns per unit of risk. Paramount Global Class is currently generating about -0.03 per unit of volatility. If you would invest 2,171 in Paramount Global Class on October 19, 2024 and sell it today you would lose (1,144) from holding Paramount Global Class or give up 52.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sirius XM Holding vs. Paramount Global Class
Performance |
| Timeline |
| Sirius XM Holding |
| Paramount Global Class |
Sirius XM and Paramount Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sirius XM and Paramount Global
The main advantage of trading using opposite Sirius XM and Paramount Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sirius XM position performs unexpectedly, Paramount Global 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 Paramount Global will offset losses from the drop in Paramount Global's long position.| Sirius XM vs. Paramount Global Class | Sirius XM vs. Walt Disney | Sirius XM vs. Roku Inc | Sirius XM vs. Netflix |
| Paramount Global vs. Walt Disney | Paramount Global vs. Roku Inc | Paramount Global vs. Netflix | Paramount Global vs. AMC Entertainment Holdings |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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