Correlation Between Maiden Holdings and Siriuspoint

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

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

Diversification Opportunities for Maiden Holdings and Siriuspoint

0.34

Correlation Coefficient

Maiden Holdings  Siriuspoint

Weak diversification

The 3 months correlation between Maiden and Siriuspoint is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Maiden Holdings and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint and Maiden Holdings 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 Maiden Holdings 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 Maiden Holdings i.e., Maiden Holdings and Siriuspoint go up and down completely randomly.

Pair Corralation between Maiden Holdings and Siriuspoint

Given the investment horizon of 90 days Maiden Holdings is expected to generate 2.66 times less return on investment than Siriuspoint. In addition to that, Maiden Holdings is 1.58 times more volatile than Siriuspoint. It trades about 0.02 of its total potential returns per unit of risk. Siriuspoint is currently generating about 0.07 per unit of volatility. If you would invest  591.00  in Siriuspoint on January 26, 2024 and sell it today you would earn a total of  628.00  from holding Siriuspoint or generate 106.26% return on investment over 90 days.

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

Maiden Holdings  vs.  Siriuspoint

Maiden Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Maiden Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, Maiden Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 Maiden Holdings and Siriuspoint

The main advantage of trading using opposite Maiden Holdings and Siriuspoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maiden Holdings 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 Maiden Holdings 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.