Correlation Between Sampo Corp and Taiwan Sanyo
Can any of the company-specific risk be diversified away by investing in both Sampo Corp and Taiwan Sanyo 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 Taiwan Sanyo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sampo Corp and Taiwan Sanyo Electric, you can compare the effects of market volatilities on Sampo Corp and Taiwan Sanyo 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 Taiwan Sanyo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo Corp and Taiwan Sanyo.
Diversification Opportunities for Sampo Corp and Taiwan Sanyo
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sampo and Taiwan is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sampo Corp and Taiwan Sanyo Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Sanyo Electric 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 Taiwan Sanyo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Sanyo Electric has no effect on the direction of Sampo Corp i.e., Sampo Corp and Taiwan Sanyo go up and down completely randomly.
Pair Corralation between Sampo Corp and Taiwan Sanyo
Assuming the 90 days trading horizon Sampo Corp is expected to generate 0.66 times more return on investment than Taiwan Sanyo. However, Sampo Corp is 1.51 times less risky than Taiwan Sanyo. It trades about -0.01 of its potential returns per unit of risk. Taiwan Sanyo Electric is currently generating about -0.1 per unit of risk. If you would invest 2,890 in Sampo Corp on August 29, 2024 and sell it today you would lose (45.00) from holding Sampo Corp or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sampo Corp vs. Taiwan Sanyo Electric
Performance |
| Timeline |
| Sampo Corp |
| Taiwan Sanyo Electric |
Sampo Corp and Taiwan Sanyo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo Corp and Taiwan Sanyo
The main advantage of trading using opposite Sampo Corp and Taiwan Sanyo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo Corp position performs unexpectedly, Taiwan Sanyo 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 Taiwan Sanyo will offset losses from the drop in Taiwan Sanyo's long position.| Sampo Corp vs. Yulon Finance Corp | Sampo Corp vs. Taiwan Secom Co | Sampo Corp vs. Pou Chen Corp | Sampo Corp vs. Great Wall Enterprise |
| Taiwan Sanyo vs. Sampo Corp | Taiwan Sanyo vs. China Electric Manufacturing | Taiwan Sanyo vs. Walsin Lihwa Corp | Taiwan Sanyo vs. Ta Ya Electric |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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