Correlation Between OLD MUTUAL and SIRIUSPOINT

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Can any of the company-specific risk be diversified away by investing in both OLD MUTUAL 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 OLD MUTUAL and SIRIUSPOINT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OLD MUTUAL LTD and SIRIUSPOINT LTD DL 10, you can compare the effects of market volatilities on OLD MUTUAL 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 OLD MUTUAL with a short position of SIRIUSPOINT. Check out your portfolio center. Please also check ongoing floating volatility patterns of OLD MUTUAL and SIRIUSPOINT.

Diversification Opportunities for OLD MUTUAL and SIRIUSPOINT

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between OLD and SIRIUSPOINT is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding OLD MUTUAL LTD and SIRIUSPOINT LTD DL 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIRIUSPOINT LTD DL and OLD MUTUAL 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 OLD MUTUAL LTD 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 LTD DL has no effect on the direction of OLD MUTUAL i.e., OLD MUTUAL and SIRIUSPOINT go up and down completely randomly.

Pair Corralation between OLD MUTUAL and SIRIUSPOINT

Assuming the 90 days horizon OLD MUTUAL is expected to generate 3.17 times less return on investment than SIRIUSPOINT. In addition to that, OLD MUTUAL is 2.53 times more volatile than SIRIUSPOINT LTD DL 10. It trades about 0.02 of its total potential returns per unit of risk. SIRIUSPOINT LTD DL 10 is currently generating about 0.13 per unit of volatility. If you would invest  1,350  in SIRIUSPOINT LTD DL 10 on April 20, 2025 and sell it today you would earn a total of  260.00  from holding SIRIUSPOINT LTD DL 10 or generate 19.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

OLD MUTUAL LTD  vs.  SIRIUSPOINT LTD DL 10

 Performance 
       Timeline  
OLD MUTUAL LTD 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in OLD MUTUAL LTD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, OLD MUTUAL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
SIRIUSPOINT LTD DL 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in SIRIUSPOINT LTD DL 10 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SIRIUSPOINT reported solid returns over the last few months and may actually be approaching a breakup point.

OLD MUTUAL and SIRIUSPOINT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with OLD MUTUAL and SIRIUSPOINT

The main advantage of trading using opposite OLD MUTUAL and SIRIUSPOINT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OLD MUTUAL 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 OLD MUTUAL LTD and SIRIUSPOINT LTD DL 10 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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