Sirius XM’s stock (NASDAQ: SIRI) has declined only slightly over the last five days to levels of around $6 currently. But will the company’s stock see higher levels over the coming weeks, or is a further decline in the stock imminent? According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price, returns for Sirius XM stock average around 3.0% in the next one-month (twenty-one trading days) period after experiencing a 0.5% fall in a week (five trading days). But how would this number change if you are interested in holding SIRI stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis machine learning engine SIRI stock chances of a rise after a fall. You can see the chance of recovery over different time intervals of a quarter, month, or even just one day!
MACHINE LEARNING ENGINE – try it yourself:
IF SIRI stock moved by -5% over five trading days, THEN over the next twenty-one trading days, SIRI stock moves an average of 3.0%, which implies an excess return of -0.2% compared to the S&P500.
More importantly, there is a 67% probability of a positive return over the next twenty-one trading days and a 51% probability of a positive excess return after a -5% change over five trading days.
Some Fun Scenarios, FAQs & Making Sense of Sirius XM Stock Movements:
Question 1: Is the average return for Sirius XM stock higher after a drop?
Answer: Consider two situations,
Case 1: SIRI stock drops by -5% or more in a week
Case 2: SIRI stock rises by 5% or more in a week
Is the average return for Sirius XM stock higher over the subsequent month after Case 1 or Case 2?
Sirius XM stock fares better after Case 1, with an average return of 3.0% over the next month (twenty-one trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 1% for Case 2.
In comparison, the S&P 500 has an average return of 3.1% over the next twenty-one trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.
Try the Trefis machine learning engine above to see for yourself how SIRI stock is likely to behave after any specific gain or loss over a period.
Question 2: Does patience pay?
Answer: If you buy and hold SIRI stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.
Overall, according to data and the Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!
You can try the engine to see what this table looks like for Sirius XM after a larger loss over the last week, month, or quarter.
Question 3: What about the average return after a rise if you wait for a while?
Answer: The average return after a rise is understandably lower than a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although SIRI stock appears to be an exception to this general observation.
SIRI’s returns over the next N days after a 5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:
It’s pretty powerful to test the trend for yourself for Sirius XM stock by changing the inputs in the charts above.
While Sirius XM may not have moved much, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how the stock valuation for Alphabet vs. LGI Homes shows a disconnect with their relative operational growth. You can find many such discontinuous pairs here.