Correlation Between Siriuspoint and Exchange Bankshares

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

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

Diversification Opportunities for Siriuspoint and Exchange Bankshares

0.56

Correlation Coefficient

Siriuspoint  Exchange Bankshares

Very weak diversification

The 3 months correlation between Siriuspoint and Exchange is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Siriuspoint and Exchange Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Bankshares 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 Exchange Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Bankshares has no effect on the direction of Siriuspoint i.e., Siriuspoint and Exchange Bankshares go up and down completely randomly.

Pair Corralation between Siriuspoint and Exchange Bankshares

Given the investment horizon of 90 days Siriuspoint is expected to generate 2.46 times less return on investment than Exchange Bankshares. In addition to that, Siriuspoint is 1.63 times more volatile than Exchange Bankshares. It trades about 0.05 of its total potential returns per unit of risk. Exchange Bankshares is currently generating about 0.18 per unit of volatility. If you would invest  3,964  in Exchange Bankshares on October 26, 2024 and sell it today you would earn a total of  826.00  from holding Exchange Bankshares or generate 20.84% return on investment over 90 days.

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

Siriuspoint  vs.  Exchange Bankshares

Siriuspoint

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 3 (%) 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.

Exchange Bankshares

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Exchange Bankshares are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, Exchange Bankshares demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Siriuspoint and Exchange Bankshares

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

The idea behind Siriuspoint and Exchange Bankshares 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.