Correlation Between Siriuspoint and Snap On
Can any of the company-specific risk be diversified away by investing in both Siriuspoint and Snap On 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 Snap On into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siriuspoint and Snap On, you can compare the effects of market volatilities on Siriuspoint and Snap On 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 Snap On. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siriuspoint and Snap On.
Diversification Opportunities for Siriuspoint and Snap On
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siriuspoint and Snap is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Siriuspoint and Snap On in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snap On 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 Snap On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snap On has no effect on the direction of Siriuspoint i.e., Siriuspoint and Snap On go up and down completely randomly.
Pair Corralation between Siriuspoint and Snap On
Given the investment horizon of 90 days Siriuspoint is expected to generate 4.27 times more return on investment than Snap On. However, Siriuspoint is 4.27 times more volatile than Snap On. It trades about -0.05 of its potential returns per unit of risk. Snap On is currently generating about -0.29 per unit of risk. 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 |
Siriuspoint vs. Snap On
Performance |
| Timeline |
| Siriuspoint |
| Snap On |
Siriuspoint and Snap On Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siriuspoint and Snap On
The main advantage of trading using opposite Siriuspoint and Snap On positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siriuspoint position performs unexpectedly, Snap On 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 Snap On will offset losses from the drop in Snap On's long position.| Siriuspoint vs. Maiden Holdings | Siriuspoint vs. Reinsurance Group of | Siriuspoint vs. Oxbridge Re Holdings | Siriuspoint vs. Greenlight Capital Re |
| Snap On vs. Lincoln Electric Holdings | Snap On vs. Timken Company | Snap On vs. Kennametal | Snap On vs. Toro Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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