Correlation Between Siriuspoint and ADVA Optical

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

By analyzing existing cross correlation between Siriuspoint and ADVA Optical Networking, you can compare the effects of market volatilities on Siriuspoint and ADVA Optical 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 ADVA Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siriuspoint and ADVA Optical.

Diversification Opportunities for Siriuspoint and ADVA Optical

0.0

Correlation Coefficient

Siriuspoint  ADVA Optical

Pay attention - limited upside

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

Pair Corralation between Siriuspoint and ADVA Optical

If you would invest  1,420  in Siriuspoint on December 29, 2024 and sell it today you would earn a total of  286.00  from holding Siriuspoint or generate 20.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Siriuspoint  vs.  ADVA Optical Networking

Siriuspoint

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 9 (%) 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.

ADVA Optical Networking

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Siriuspoint and ADVA Optical

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

The idea behind Siriuspoint and ADVA Optical Networking 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 Transaction History module to view history of all your transactions and understand their impact on performance.