Correlation Between ESAC Old and Siriuspoint

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

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

Diversification Opportunities for ESAC Old and Siriuspoint

0.2

Correlation Coefficient

ESAC Old  Siriuspoint

Modest diversification

The 3 months correlation between ESAC and Siriuspoint is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding ESAC Old and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint and ESAC Old 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 ESAC Old 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 ESAC Old i.e., ESAC Old and Siriuspoint go up and down completely randomly.

Pair Corralation between ESAC Old and Siriuspoint

If you would invest  1,213  in Siriuspoint on January 26, 2024 and sell it today you would earn a total of  6.00  from holding Siriuspoint or generate 0.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

ESAC Old  vs.  Siriuspoint

ESAC Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ESAC Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Siriuspoint

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 2 (%) 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 ESAC Old and Siriuspoint

The main advantage of trading using opposite ESAC Old and Siriuspoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESAC Old 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 ESAC Old 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.