Correlation Between Siriuspoint and GENERAL

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

Diversification Opportunities for Siriuspoint and GENERAL

-0.36
  Correlation Coefficient

Very good diversification

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

Pair Corralation between Siriuspoint and GENERAL

Given the investment horizon of 90 days Siriuspoint is expected to generate 2.68 times more return on investment than GENERAL. However, Siriuspoint is 2.68 times more volatile than GENERAL ELEC CAP. It trades about 0.25 of its potential returns per unit of risk. GENERAL ELEC CAP is currently generating about -0.14 per unit of risk. If you would invest  1,359  in Siriuspoint on August 27, 2024 and sell it today you would earn a total of  199.00  from holding Siriuspoint or generate 14.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy57.14%
ValuesDaily Returns

Siriuspoint  vs.  GENERAL ELEC CAP

 Performance 
       Timeline  
Siriuspoint 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Siriuspoint is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
GENERAL ELEC CAP 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GENERAL ELEC CAP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, GENERAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Siriuspoint and GENERAL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Siriuspoint and GENERAL

The main advantage of trading using opposite Siriuspoint and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siriuspoint position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.
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The idea behind Siriuspoint and GENERAL ELEC CAP 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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