Correlation Between Snap On and Siriuspoint
Can any of the company-specific risk be diversified away by investing in both Snap On 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 Snap On and Siriuspoint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap On and Siriuspoint, you can compare the effects of market volatilities on Snap On 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 Snap On with a short position of Siriuspoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap On and Siriuspoint.
Diversification Opportunities for Snap On and Siriuspoint
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Siriuspoint is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Snap On and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint and Snap On 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 Snap On 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 Snap On i.e., Snap On and Siriuspoint go up and down completely randomly.
Pair Corralation between Snap On and Siriuspoint
Considering the 90-day investment horizon Snap On is expected to under-perform the Siriuspoint. But the stock apears to be less risky and, when comparing its historical volatility, Snap On is 4.27 times less risky than Siriuspoint. The stock trades about -0.29 of its potential returns per unit of risk. The Siriuspoint is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,576 in Siriuspoint on October 12, 2024 and sell it today you would lose (81.00) from holding Siriuspoint or give up 5.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap On vs. Siriuspoint
Performance |
| Timeline |
| Snap On |
| Siriuspoint |
Snap On and Siriuspoint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap On and Siriuspoint
The main advantage of trading using opposite Snap On and Siriuspoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap On 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.| Snap On vs. Lincoln Electric Holdings | Snap On vs. Timken Company | Snap On vs. Kennametal | Snap On vs. Toro Co |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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