Correlation Between Sirius XM and Nielsen Holdings

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

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

Diversification Opportunities for Sirius XM and Nielsen Holdings

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Correlation Coefficient

Sirius XM  Nielsen Holdings

Pay attention - limited upside

The 3 months correlation between Sirius and Nielsen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sirius XM Holding and Nielsen Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nielsen Holdings PLC and Sirius XM 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 Sirius XM Holding are associated (or correlated) with Nielsen Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nielsen Holdings PLC has no effect on the direction of Sirius XM i.e., Sirius XM and Nielsen Holdings go up and down completely randomly.

Pair Corralation between Sirius XM and Nielsen Holdings

If you would invest (100.00) in Nielsen Holdings PLC on January 26, 2024 and sell it today you would earn a total of  100.00  from holding Nielsen Holdings PLC or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sirius XM Holding  vs.  Nielsen Holdings PLC

Sirius XM Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sirius XM Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Nielsen Holdings PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nielsen Holdings PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Nielsen Holdings is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sirius XM and Nielsen Holdings

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

The idea behind Sirius XM Holding and Nielsen Holdings PLC 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.