Correlation Between Ta Ya and Sampo Corp
Can any of the company-specific risk be diversified away by investing in both Ta Ya and Sampo Corp 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 Ta Ya and Sampo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ta Ya Electric and Sampo Corp, you can compare the effects of market volatilities on Ta Ya and Sampo Corp 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 Ta Ya with a short position of Sampo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ta Ya and Sampo Corp.
Diversification Opportunities for Ta Ya and Sampo Corp
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 1609 and Sampo is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ta Ya Electric and Sampo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sampo Corp and Ta Ya 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 Ta Ya Electric are associated (or correlated) with Sampo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sampo Corp has no effect on the direction of Ta Ya i.e., Ta Ya and Sampo Corp go up and down completely randomly.
Pair Corralation between Ta Ya and Sampo Corp
Assuming the 90 days trading horizon Ta Ya Electric is expected to under-perform the Sampo Corp. In addition to that, Ta Ya is 6.24 times more volatile than Sampo Corp. It trades about -0.35 of its total potential returns per unit of risk. Sampo Corp is currently generating about 0.09 per unit of volatility. If you would invest 2,795 in Sampo Corp on November 5, 2024 and sell it today you would earn a total of 10.00 from holding Sampo Corp or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ta Ya Electric vs. Sampo Corp
Performance |
| Timeline |
| Ta Ya Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sampo Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ta Ya and Sampo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ta Ya and Sampo Corp
The main advantage of trading using opposite Ta Ya and Sampo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ta Ya position performs unexpectedly, Sampo Corp 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 Sampo Corp will offset losses from the drop in Sampo Corp's long position.The idea behind Ta Ya Electric and Sampo 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |