Correlation Between Siriuspoint and ICC Holdings

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

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

Diversification Opportunities for Siriuspoint and ICC Holdings

0.31

Correlation Coefficient

Siriuspoint  ICC Holdings

Weak diversification

The 3 months correlation between Siriuspoint and ICC is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Siriuspoint and ICC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICC 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 ICC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICC Holdings has no effect on the direction of Siriuspoint i.e., Siriuspoint and ICC Holdings go up and down completely randomly.

Pair Corralation between Siriuspoint and ICC Holdings

Given the investment horizon of 90 days Siriuspoint is expected to under-perform the ICC Holdings. In addition to that, Siriuspoint is 3.12 times more volatile than ICC Holdings. It trades about -0.01 of its total potential returns per unit of risk. ICC Holdings is currently generating about 0.05 per unit of volatility. If you would invest  2,298  in ICC Holdings on September 27, 2024 and sell it today you would earn a total of  45.00  from holding ICC Holdings or generate 1.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	89.06%
Values	Daily Returns

Siriuspoint  vs.  ICC Holdings

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.

ICC Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ICC Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, ICC Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Siriuspoint and ICC Holdings

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

The idea behind Siriuspoint and ICC Holdings 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.