Correlation Between Sampo Corp and Carnival Industrial
Can any of the company-specific risk be diversified away by investing in both Sampo Corp and Carnival Industrial 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 Sampo Corp and Carnival Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sampo Corp and Carnival Industrial Corp, you can compare the effects of market volatilities on Sampo Corp and Carnival Industrial 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 Sampo Corp with a short position of Carnival Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo Corp and Carnival Industrial.
Diversification Opportunities for Sampo Corp and Carnival Industrial
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sampo and Carnival is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sampo Corp and Carnival Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnival Industrial Corp and Sampo Corp 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 Sampo Corp are associated (or correlated) with Carnival Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnival Industrial Corp has no effect on the direction of Sampo Corp i.e., Sampo Corp and Carnival Industrial go up and down completely randomly.
Pair Corralation between Sampo Corp and Carnival Industrial
Assuming the 90 days trading horizon Sampo Corp is expected to generate 0.2 times more return on investment than Carnival Industrial. However, Sampo Corp is 4.93 times less risky than Carnival Industrial. It trades about -0.09 of its potential returns per unit of risk. Carnival Industrial Corp is currently generating about -0.23 per unit of risk. If you would invest 2,830 in Sampo Corp on November 2, 2024 and sell it today you would lose (25.00) from holding Sampo Corp or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sampo Corp vs. Carnival Industrial Corp
Performance |
| Timeline |
| Sampo Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Carnival Industrial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sampo Corp and Carnival Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo Corp and Carnival Industrial
The main advantage of trading using opposite Sampo Corp and Carnival Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo Corp position performs unexpectedly, Carnival Industrial 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 Carnival Industrial will offset losses from the drop in Carnival Industrial's long position.The idea behind Sampo Corp and Carnival Industrial Corp 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.Check out your portfolio center.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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |