Correlation Between SiriusPoint and RenaissanceRe Holdings
Can any of the company-specific risk be diversified away by investing in both SiriusPoint and RenaissanceRe Holdings 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 RenaissanceRe Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SiriusPoint and RenaissanceRe Holdings, you can compare the effects of market volatilities on SiriusPoint and RenaissanceRe Holdings 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 RenaissanceRe Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SiriusPoint and RenaissanceRe Holdings.
Diversification Opportunities for SiriusPoint and RenaissanceRe Holdings
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SiriusPoint and RenaissanceRe is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SiriusPoint and RenaissanceRe Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RenaissanceRe Holdings 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 RenaissanceRe Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RenaissanceRe Holdings has no effect on the direction of SiriusPoint i.e., SiriusPoint and RenaissanceRe Holdings go up and down completely randomly.
Pair Corralation between SiriusPoint and RenaissanceRe Holdings
Assuming the 90 days trading horizon SiriusPoint is expected to generate 0.43 times more return on investment than RenaissanceRe Holdings. However, SiriusPoint is 2.35 times less risky than RenaissanceRe Holdings. It trades about 0.13 of its potential returns per unit of risk. RenaissanceRe Holdings is currently generating about -0.04 per unit of risk. If you would invest 2,478 in SiriusPoint on August 23, 2024 and sell it today you would earn a total of 53.00 from holding SiriusPoint or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SiriusPoint vs. RenaissanceRe Holdings
Performance |
| Timeline |
| SiriusPoint |
| RenaissanceRe Holdings |
SiriusPoint and RenaissanceRe Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SiriusPoint and RenaissanceRe Holdings
The main advantage of trading using opposite SiriusPoint and RenaissanceRe Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SiriusPoint position performs unexpectedly, RenaissanceRe Holdings 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 RenaissanceRe Holdings will offset losses from the drop in RenaissanceRe Holdings' long position.| SiriusPoint vs. RLJ Lodging Trust | SiriusPoint vs. Argo Group International | SiriusPoint vs. New York Mortgage | SiriusPoint vs. Aquagold International |
| RenaissanceRe Holdings vs. RenaissanceRe Holdings | RenaissanceRe Holdings vs. Athene Holding | RenaissanceRe Holdings vs. AXIS Capital Holdings | RenaissanceRe Holdings vs. Truist Financial |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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