Correlation Between SiriusPoint and Oxbridge

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

By analyzing existing cross correlation between SiriusPoint and Oxbridge Re Holdings, you can compare the effects of market volatilities on SiriusPoint and Oxbridge 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 Oxbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of SiriusPoint and Oxbridge.

Diversification Opportunities for SiriusPoint and Oxbridge

0.8

Correlation Coefficient

SiriusPoint  Oxbridge

Very poor diversification

The 3 months correlation between SiriusPoint and Oxbridge is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SiriusPoint and Oxbridge Re Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxbridge Re Holdings 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 Oxbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxbridge Re Holdings has no effect on the direction of SiriusPoint i.e., SiriusPoint and Oxbridge go up and down completely randomly.

Pair Corralation between SiriusPoint and Oxbridge

Assuming the 90 days trading horizon SiriusPoint is expected to generate 47.13 times less return on investment than Oxbridge. But when comparing it to its historical volatility, SiriusPoint is 14.95 times less risky than Oxbridge. It trades about 0.06 of its potential returns per unit of risk. Oxbridge Re Holdings is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  305.00  in Oxbridge Re Holdings on September 27, 2024 and sell it today you would earn a total of  76.00  from holding Oxbridge Re Holdings or generate 24.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.45%
Values	Daily Returns

SiriusPoint  vs.  Oxbridge Re Holdings

SiriusPoint

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SiriusPoint are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, SiriusPoint is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oxbridge Re Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oxbridge Re Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental drivers, Oxbridge reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SiriusPoint and Oxbridge

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

The idea behind SiriusPoint and Oxbridge Re Holdings 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.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.