Correlation Between Siriuspoint and MARTIN

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

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

Diversification Opportunities for Siriuspoint and MARTIN

-0.11

Correlation Coefficient

Siriuspoint  MARTIN

Good diversification

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

Pair Corralation between Siriuspoint and MARTIN

Given the investment horizon of 90 days Siriuspoint is expected to under-perform the MARTIN. In addition to that, Siriuspoint is 1.34 times more volatile than MARTIN MARIETTA MATERIALS. It trades about -0.31 of its total potential returns per unit of risk. MARTIN MARIETTA MATERIALS is currently generating about -0.25 per unit of volatility. If you would invest  8,592  in MARTIN MARIETTA MATERIALS on September 25, 2024 and sell it today you would lose (510.00) from holding MARTIN MARIETTA MATERIALS or give up 5.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Siriuspoint  vs.  MARTIN MARIETTA MATERIALS

Siriuspoint

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siriuspoint has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Siriuspoint is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

MARTIN MARIETTA MATERIALS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MARTIN MARIETTA MATERIALS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for MARTIN MARIETTA MATERIALS investors.

Pair Trading with Siriuspoint and MARTIN

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

The idea behind Siriuspoint and MARTIN MARIETTA MATERIALS 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..