Correlation Between Renaissancere Holdings and Siriuspoint

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

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

Diversification Opportunities for Renaissancere Holdings and Siriuspoint

0.76

Correlation Coefficient

Renaissancere Holdings  Siriuspoint

Poor diversification

The 3 months correlation between Renaissancere and Siriuspoint is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Renaissancere Holdings and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint and Renaissancere 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 Renaissancere 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 Renaissancere Holdings i.e., Renaissancere Holdings and Siriuspoint go up and down completely randomly.

Pair Corralation between Renaissancere Holdings and Siriuspoint

Considering the 90-day investment horizon Renaissancere Holdings is expected to under-perform the Siriuspoint. But the stock apears to be less risky and, when comparing its historical volatility, Renaissancere Holdings is 1.47 times less risky than Siriuspoint. The stock trades about -0.19 of its potential returns per unit of risk. The Siriuspoint is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,542  in Siriuspoint on November 29, 2024 and sell it today you would lose (46.00) from holding Siriuspoint or give up 2.98% of portfolio value over 90 days.

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

Renaissancere Holdings  vs.  Siriuspoint

Renaissancere Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Renaissancere Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Siriuspoint

Risk-Adjusted Performance

Very Weak

Over the last 90 days Siriuspoint has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Siriuspoint is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Renaissancere Holdings and Siriuspoint

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

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.