Correlation Between Sampo Corp and E Lead
Can any of the company-specific risk be diversified away by investing in both Sampo Corp and E Lead 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 E Lead into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sampo Corp and E Lead Electronic Co, you can compare the effects of market volatilities on Sampo Corp and E Lead 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 E Lead. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo Corp and E Lead.
Diversification Opportunities for Sampo Corp and E Lead
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sampo and 2497 is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sampo Corp and E Lead Electronic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Lead Electronic 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 E Lead. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Lead Electronic has no effect on the direction of Sampo Corp i.e., Sampo Corp and E Lead go up and down completely randomly.
Pair Corralation between Sampo Corp and E Lead
Assuming the 90 days trading horizon Sampo Corp is expected to generate 0.51 times more return on investment than E Lead. However, Sampo Corp is 1.95 times less risky than E Lead. It trades about 0.03 of its potential returns per unit of risk. E Lead Electronic Co is currently generating about -0.01 per unit of risk. If you would invest 2,545 in Sampo Corp on August 26, 2024 and sell it today you would earn a total of 290.00 from holding Sampo Corp or generate 11.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sampo Corp vs. E Lead Electronic Co
Performance |
| Timeline |
| Sampo Corp |
| E Lead Electronic |
Sampo Corp and E Lead Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo Corp and E Lead
The main advantage of trading using opposite Sampo Corp and E Lead positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo Corp position performs unexpectedly, E Lead 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 E Lead will offset losses from the drop in E Lead's long position.| Sampo Corp vs. Taiwan Semiconductor Manufacturing | Sampo Corp vs. Hon Hai Precision | Sampo Corp vs. MediaTek | Sampo Corp vs. Chunghwa Telecom Co |
| E Lead vs. Weltrend Semiconductor | E Lead vs. Catcher Technology Co | E Lead vs. Cub Elecparts | E Lead vs. Elan Microelectronics 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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