Correlation Between Siriuspoint and Macmahon Holdings

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

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

Diversification Opportunities for Siriuspoint and Macmahon Holdings

-0.11

Correlation Coefficient

Siriuspoint  Macmahon Holdings

Good diversification

The 3 months correlation between Siriuspoint and Macmahon is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Siriuspoint and Macmahon Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macmahon Holdings 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 Macmahon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macmahon Holdings has no effect on the direction of Siriuspoint i.e., Siriuspoint and Macmahon Holdings go up and down completely randomly.

Pair Corralation between Siriuspoint and Macmahon Holdings

Given the investment horizon of 90 days Siriuspoint is expected to generate 1.89 times more return on investment than Macmahon Holdings. However, Siriuspoint is 1.89 times more volatile than Macmahon Holdings Limited. It trades about 0.07 of its potential returns per unit of risk. Macmahon Holdings Limited is currently generating about -0.13 per unit of risk. If you would invest  1,357  in Siriuspoint on October 23, 2024 and sell it today you would earn a total of  142.00  from holding Siriuspoint or generate 10.46% return on investment over 90 days.

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

Siriuspoint  vs.  Macmahon Holdings Limited

Siriuspoint

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 5 (%) 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.

Macmahon Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Macmahon Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical 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 Macmahon Holdings

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

The idea behind Siriuspoint and Macmahon Holdings Limited 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..