Correlation Between Siriuspoint and JetAI

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

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

Diversification Opportunities for Siriuspoint and JetAI

-0.7

Correlation Coefficient

Siriuspoint  JetAI

Excellent diversification

The 3 months correlation between Siriuspoint and JetAI is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Siriuspoint and JetAI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JetAI Inc 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 JetAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JetAI Inc has no effect on the direction of Siriuspoint i.e., Siriuspoint and JetAI go up and down completely randomly.

Pair Corralation between Siriuspoint and JetAI

Given the investment horizon of 90 days Siriuspoint is expected to generate 0.2 times more return on investment than JetAI. However, Siriuspoint is 5.03 times less risky than JetAI. It trades about 0.08 of its potential returns per unit of risk. JetAI Inc is currently generating about -0.22 per unit of risk. If you would invest  1,417  in Siriuspoint on September 14, 2024 and sell it today you would earn a total of  138.00  from holding Siriuspoint or generate 9.74% return on investment over 90 days.

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

Siriuspoint  vs.  JetAI Inc

Siriuspoint

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 6 (%) 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.

JetAI Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JetAI Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Siriuspoint and JetAI

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

The idea behind Siriuspoint and JetAI Inc 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.