Correlation Between SCOR PK and Siriuspoint

Can any of the company-specific risk be diversified away by investing in both SCOR PK and Siriuspoint 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 SCOR PK and Siriuspoint into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SCOR PK and Siriuspoint, you can compare the effects of market volatilities on SCOR PK and Siriuspoint 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 SCOR PK with a short position of Siriuspoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Siriuspoint.

Diversification Opportunities for SCOR PK and Siriuspoint

0.7

Correlation Coefficient

SCOR PK  Siriuspoint

Poor diversification

The 3 months correlation between SCOR and Siriuspoint is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint and SCOR PK 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 SCOR PK are associated (or correlated) with Siriuspoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siriuspoint has no effect on the direction of SCOR PK i.e., SCOR PK and Siriuspoint go up and down completely randomly.

Pair Corralation between SCOR PK and Siriuspoint

Assuming the 90 days horizon SCOR PK is expected to generate 1.77 times less return on investment than Siriuspoint. In addition to that, SCOR PK is 1.29 times more volatile than Siriuspoint. It trades about 0.05 of its total potential returns per unit of risk. Siriuspoint is currently generating about 0.11 per unit of volatility. If you would invest  614.00  in Siriuspoint on January 31, 2024 and sell it today you would earn a total of  587.00  from holding Siriuspoint or generate 95.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

SCOR PK  vs.  Siriuspoint

SCOR PK

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR PK are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, SCOR PK may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Siriuspoint

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 1 (%) 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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SCOR PK and Siriuspoint

The main advantage of trading using opposite SCOR PK and Siriuspoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Siriuspoint 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 Siriuspoint will offset losses from the drop in Siriuspoint's long position.

The idea behind SCOR PK and Siriuspoint 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.