Correlation Between Barloworld and Siriuspoint

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

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

Diversification Opportunities for Barloworld and Siriuspoint

0.0

Correlation Coefficient

Barloworld  Siriuspoint

Pay attention - limited upside

The 3 months correlation between Barloworld and Siriuspoint is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint and Barloworld 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 Barloworld 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 Barloworld i.e., Barloworld and Siriuspoint go up and down completely randomly.

Pair Corralation between Barloworld and Siriuspoint

If you would invest  1,398  in Siriuspoint on December 24, 2024 and sell it today you would earn a total of  225.00  from holding Siriuspoint or generate 16.09% return on investment over 90 days.

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

Barloworld  vs.  Siriuspoint

Barloworld

Risk-Adjusted Performance

Very Weak

Over the last 90 days Barloworld has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Barloworld is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Siriuspoint

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Siriuspoint unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Barloworld and Siriuspoint

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