Correlation Between Siriuspoint and Narragansett Electric
Can any of the company-specific risk be diversified away by investing in both Siriuspoint and Narragansett Electric 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 Narragansett Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siriuspoint and The Narragansett Electric, you can compare the effects of market volatilities on Siriuspoint and Narragansett Electric 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 Narragansett Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siriuspoint and Narragansett Electric.
Diversification Opportunities for Siriuspoint and Narragansett Electric
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Siriuspoint and Narragansett is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Siriuspoint and The Narragansett Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Narragansett Electric 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 Narragansett Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Narragansett Electric has no effect on the direction of Siriuspoint i.e., Siriuspoint and Narragansett Electric go up and down completely randomly.
Pair Corralation between Siriuspoint and Narragansett Electric
If you would invest 5,500 in The Narragansett Electric on October 28, 2024 and sell it today you would earn a total of 0.00 from holding The Narragansett Electric or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 2.56% |
| Values | Daily Returns |
Siriuspoint vs. The Narragansett Electric
Performance |
| Timeline |
| Siriuspoint |
| The Narragansett Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Siriuspoint and Narragansett Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siriuspoint and Narragansett Electric
The main advantage of trading using opposite Siriuspoint and Narragansett Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siriuspoint position performs unexpectedly, Narragansett Electric 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 Narragansett Electric will offset losses from the drop in Narragansett Electric's long position.| Siriuspoint vs. Maiden Holdings | Siriuspoint vs. Reinsurance Group of | Siriuspoint vs. Oxbridge Re Holdings | Siriuspoint vs. Greenlight Capital Re |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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