Correlation Between SCOR SE and Siriuspoint

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

By analyzing existing cross correlation between SCOR SE and Siriuspoint, you can compare the effects of market volatilities on SCOR SE and Siriuspoint 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 SCOR SE with a short position of Siriuspoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR SE and Siriuspoint.

Diversification Opportunities for SCOR SE and Siriuspoint

0.75

Correlation Coefficient

SCOR SE  Siriuspoint

Poor diversification

The 3 months correlation between SCOR and Siriuspoint is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SCOR SE and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint and SCOR SE 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 SCOR SE are associated (or correlated) with Siriuspoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siriuspoint has no effect on the direction of SCOR SE i.e., SCOR SE and Siriuspoint go up and down completely randomly.

Pair Corralation between SCOR SE and Siriuspoint

Assuming the 90 days horizon SCOR SE is expected to generate 0.55 times more return on investment than Siriuspoint. However, SCOR SE is 1.8 times less risky than Siriuspoint. It trades about 0.12 of its potential returns per unit of risk. Siriuspoint is currently generating about 0.06 per unit of risk. If you would invest  2,160  in SCOR SE on September 19, 2024 and sell it today you would earn a total of  180.00  from holding SCOR SE or generate 8.33% return on investment over 90 days.

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

SCOR SE  vs.  Siriuspoint

SCOR SE

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR SE are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, SCOR SE may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

Pair Trading with SCOR SE and Siriuspoint

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

The idea behind SCOR SE and Siriuspoint 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.