Correlation Between SiriusPoint and Reinsurance Group

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Can any of the company-specific risk be diversified away by investing in both SiriusPoint and Reinsurance Group 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 SiriusPoint and Reinsurance Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SiriusPoint and Reinsurance Group of, you can compare the effects of market volatilities on SiriusPoint and Reinsurance Group 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 SiriusPoint with a short position of Reinsurance Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SiriusPoint and Reinsurance Group.

Diversification Opportunities for SiriusPoint and Reinsurance Group

SiriusPointReinsuranceDiversified AwaySiriusPointReinsuranceDiversified Away100%
-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between SiriusPoint and Reinsurance is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding SiriusPoint and Reinsurance Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reinsurance Group and SiriusPoint 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 SiriusPoint are associated (or correlated) with Reinsurance Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reinsurance Group has no effect on the direction of SiriusPoint i.e., SiriusPoint and Reinsurance Group go up and down completely randomly.

Pair Corralation between SiriusPoint and Reinsurance Group

Assuming the 90 days trading horizon SiriusPoint is expected to generate 0.07 times more return on investment than Reinsurance Group. However, SiriusPoint is 14.72 times less risky than Reinsurance Group. It trades about 0.15 of its potential returns per unit of risk. Reinsurance Group of is currently generating about -0.2 per unit of risk. If you would invest  2,509  in SiriusPoint on November 27, 2024 and sell it today you would earn a total of  16.00  from holding SiriusPoint or generate 0.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SiriusPoint  vs.  Reinsurance Group of

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-50
JavaScript chart by amCharts 3.21.15SPNT-PB RGA
       Timeline  
SiriusPoint 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in SiriusPoint are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, SiriusPoint is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb24.824.92525.125.2
Reinsurance Group 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Reinsurance Group of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb190195200205210215220225230

SiriusPoint and Reinsurance Group Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.09-0.78-0.47-0.160.0048810.20.510.821.131.44 0.51.01.52.02.53.0
JavaScript chart by amCharts 3.21.15SPNT-PB RGA
       Returns  

Pair Trading with SiriusPoint and Reinsurance Group

The main advantage of trading using opposite SiriusPoint and Reinsurance Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SiriusPoint position performs unexpectedly, Reinsurance Group 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 Reinsurance Group will offset losses from the drop in Reinsurance Group's long position.
The idea behind SiriusPoint and Reinsurance Group of pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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