Correlation Between SiriusPoint and Everest

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

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

Diversification Opportunities for SiriusPoint and Everest

-0.47

Correlation Coefficient

SiriusPoint  Everest

Very good diversification

The 3 months correlation between SiriusPoint and Everest is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding SiriusPoint and Everest Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everest Group and SiriusPoint 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 SiriusPoint are associated (or correlated) with Everest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everest Group has no effect on the direction of SiriusPoint i.e., SiriusPoint and Everest go up and down completely randomly.

Pair Corralation between SiriusPoint and Everest

Assuming the 90 days trading horizon SiriusPoint is expected to generate 0.45 times more return on investment than Everest. However, SiriusPoint is 2.22 times less risky than Everest. It trades about 0.02 of its potential returns per unit of risk. Everest Group is currently generating about -0.37 per unit of risk. If you would invest  2,531  in SiriusPoint on September 22, 2024 and sell it today you would earn a total of  5.00  from holding SiriusPoint or generate 0.2% return on investment over 90 days.

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

SiriusPoint  vs.  Everest Group

SiriusPoint

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SiriusPoint are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, SiriusPoint is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Everest Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Everest Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SiriusPoint and Everest

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

The idea behind SiriusPoint and Everest Group 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.