Correlation Between SiriusPoint and XOMA Corp
Can any of the company-specific risk be diversified away by investing in both SiriusPoint and XOMA Corp 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 XOMA Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SiriusPoint and XOMA Corp, you can compare the effects of market volatilities on SiriusPoint and XOMA Corp 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 XOMA Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of SiriusPoint and XOMA Corp.
Diversification Opportunities for SiriusPoint and XOMA Corp
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SiriusPoint and XOMA is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SiriusPoint and XOMA Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XOMA Corp 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 XOMA Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XOMA Corp has no effect on the direction of SiriusPoint i.e., SiriusPoint and XOMA Corp go up and down completely randomly.
Pair Corralation between SiriusPoint and XOMA Corp
Assuming the 90 days trading horizon SiriusPoint is expected to generate 1.29 times less return on investment than XOMA Corp. But when comparing it to its historical volatility, SiriusPoint is 1.32 times less risky than XOMA Corp. It trades about 0.05 of its potential returns per unit of risk. XOMA Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,016 in XOMA Corp on August 28, 2024 and sell it today you would earn a total of 559.00 from holding XOMA Corp or generate 27.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SiriusPoint vs. XOMA Corp
Performance |
| Timeline |
| SiriusPoint |
| XOMA Corp |
SiriusPoint and XOMA Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SiriusPoint and XOMA Corp
The main advantage of trading using opposite SiriusPoint and XOMA Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SiriusPoint position performs unexpectedly, XOMA Corp 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 XOMA Corp will offset losses from the drop in XOMA Corp's long position.| SiriusPoint vs. RLJ Lodging Trust | SiriusPoint vs. Argo Group International | SiriusPoint vs. New York Mortgage | SiriusPoint vs. Aquagold International |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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