Correlation Between Siriuspoint and CONSOLIDATED

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

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

Diversification Opportunities for Siriuspoint and CONSOLIDATED

0.29

Correlation Coefficient

Siriuspoint  CONSOLIDATED

Modest diversification

The 3 months correlation between Siriuspoint and CONSOLIDATED is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Siriuspoint and CONSOLIDATED EDISON N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSOLIDATED EDISON 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 CONSOLIDATED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSOLIDATED EDISON has no effect on the direction of Siriuspoint i.e., Siriuspoint and CONSOLIDATED go up and down completely randomly.

Pair Corralation between Siriuspoint and CONSOLIDATED

Given the investment horizon of 90 days Siriuspoint is expected to generate 1.35 times more return on investment than CONSOLIDATED. However, Siriuspoint is 1.35 times more volatile than CONSOLIDATED EDISON N. It trades about 0.1 of its potential returns per unit of risk. CONSOLIDATED EDISON N is currently generating about 0.06 per unit of risk. If you would invest  1,422  in Siriuspoint on December 27, 2024 and sell it today you would earn a total of  228.00  from holding Siriuspoint or generate 16.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	56.67%
Values	Daily Returns

Siriuspoint  vs.  CONSOLIDATED EDISON N

Siriuspoint

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 8 (%) 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.

CONSOLIDATED EDISON

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CONSOLIDATED EDISON N are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CONSOLIDATED may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Siriuspoint and CONSOLIDATED

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

The idea behind Siriuspoint and CONSOLIDATED EDISON N 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.