Correlation Between Siriuspoint and Arhaus

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

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

Diversification Opportunities for Siriuspoint and Arhaus

0.55

Correlation Coefficient

Siriuspoint  Arhaus

Very weak diversification

The 3 months correlation between Siriuspoint and Arhaus is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Siriuspoint and Arhaus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arhaus Inc 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 Arhaus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arhaus Inc has no effect on the direction of Siriuspoint i.e., Siriuspoint and Arhaus go up and down completely randomly.

Pair Corralation between Siriuspoint and Arhaus

Given the investment horizon of 90 days Siriuspoint is expected to generate 6.27 times less return on investment than Arhaus. In addition to that, Siriuspoint is 1.07 times more volatile than Arhaus Inc. It trades about 0.05 of its total potential returns per unit of risk. Arhaus Inc is currently generating about 0.36 per unit of volatility. If you would invest  941.00  in Arhaus Inc on October 26, 2024 and sell it today you would earn a total of  271.00  from holding Arhaus Inc or generate 28.8% return on investment over 90 days.

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

Siriuspoint  vs.  Arhaus Inc

Siriuspoint

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Siriuspoint may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Arhaus Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Arhaus Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical indicators, Arhaus unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Siriuspoint and Arhaus

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

The idea behind Siriuspoint and Arhaus Inc 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.