Correlation Between Sampo Corp and TECO Electric
Can any of the company-specific risk be diversified away by investing in both Sampo Corp and TECO Electric 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 TECO Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sampo Corp and TECO Electric Machinery, you can compare the effects of market volatilities on Sampo Corp and TECO Electric 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 TECO Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo Corp and TECO Electric.
Diversification Opportunities for Sampo Corp and TECO Electric
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sampo and TECO is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sampo Corp and TECO Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TECO Electric Machinery 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 TECO Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TECO Electric Machinery has no effect on the direction of Sampo Corp i.e., Sampo Corp and TECO Electric go up and down completely randomly.
Pair Corralation between Sampo Corp and TECO Electric
Assuming the 90 days trading horizon Sampo Corp is expected to under-perform the TECO Electric. But the stock apears to be less risky and, when comparing its historical volatility, Sampo Corp is 3.0 times less risky than TECO Electric. The stock trades about -0.06 of its potential returns per unit of risk. The TECO Electric Machinery is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 4,940 in TECO Electric Machinery on September 1, 2024 and sell it today you would earn a total of 370.00 from holding TECO Electric Machinery or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sampo Corp vs. TECO Electric Machinery
Performance |
| Timeline |
| Sampo Corp |
| TECO Electric Machinery |
Sampo Corp and TECO Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo Corp and TECO Electric
The main advantage of trading using opposite Sampo Corp and TECO Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo Corp position performs unexpectedly, TECO Electric 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 TECO Electric will offset losses from the drop in TECO Electric's long position.| Sampo Corp vs. TECO Electric Machinery | Sampo Corp vs. Walsin Lihwa Corp | Sampo Corp vs. Asia Cement Corp | Sampo Corp vs. Far Eastern New |
| TECO Electric vs. Walsin Lihwa Corp | TECO Electric vs. Far Eastern New | TECO Electric vs. Nan Ya Plastics | TECO Electric vs. Taiwan Cement Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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