Correlation Between Siriuspoint and BCB Bancorp

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

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

Diversification Opportunities for Siriuspoint and BCB Bancorp

0.64

Correlation Coefficient

Siriuspoint  BCB Bancorp

Poor diversification

The 3 months correlation between Siriuspoint and BCB is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Siriuspoint and BCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCB Bancorp 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 BCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCB Bancorp has no effect on the direction of Siriuspoint i.e., Siriuspoint and BCB Bancorp go up and down completely randomly.

Pair Corralation between Siriuspoint and BCB Bancorp

Given the investment horizon of 90 days Siriuspoint is expected to generate 1.99 times less return on investment than BCB Bancorp. But when comparing it to its historical volatility, Siriuspoint is 1.05 times less risky than BCB Bancorp. It trades about 0.05 of its potential returns per unit of risk. BCB Bancorp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,181  in BCB Bancorp on September 2, 2024 and sell it today you would earn a total of  146.00  from holding BCB Bancorp or generate 12.36% return on investment over 90 days.

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

Siriuspoint  vs.  BCB Bancorp

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 weak basic indicators, Siriuspoint may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BCB Bancorp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BCB Bancorp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental drivers, BCB Bancorp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Siriuspoint and BCB Bancorp

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

The idea behind Siriuspoint and BCB Bancorp 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.