Correlation Between Enagas SA and Sampo OYJ
Can any of the company-specific risk be diversified away by investing in both Enagas SA and Sampo OYJ 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 Enagas SA and Sampo OYJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enagas SA and Sampo OYJ, you can compare the effects of market volatilities on Enagas SA and Sampo OYJ 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 Enagas SA with a short position of Sampo OYJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enagas SA and Sampo OYJ.
Diversification Opportunities for Enagas SA and Sampo OYJ
Almost no diversification
The 3 months correlation between Enagas and Sampo is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Enagas SA and Sampo OYJ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sampo OYJ and Enagas SA 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 Enagas SA are associated (or correlated) with Sampo OYJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sampo OYJ has no effect on the direction of Enagas SA i.e., Enagas SA and Sampo OYJ go up and down completely randomly.
Pair Corralation between Enagas SA and Sampo OYJ
Assuming the 90 days horizon Enagas SA is expected to under-perform the Sampo OYJ. In addition to that, Enagas SA is 1.25 times more volatile than Sampo OYJ. It trades about -0.04 of its total potential returns per unit of risk. Sampo OYJ is currently generating about 0.03 per unit of volatility. If you would invest 1,888 in Sampo OYJ on September 19, 2024 and sell it today you would earn a total of 159.00 from holding Sampo OYJ or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.66% |
| Values | Daily Returns |
Enagas SA vs. Sampo OYJ
Performance |
| Timeline |
| Enagas SA |
| Sampo OYJ |
Enagas SA and Sampo OYJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enagas SA and Sampo OYJ
The main advantage of trading using opposite Enagas SA and Sampo OYJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enagas SA position performs unexpectedly, Sampo OYJ 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 OYJ will offset losses from the drop in Sampo OYJ's long position.| Enagas SA vs. Northwest Natural Gas | Enagas SA vs. Chesapeake Utilities | Enagas SA vs. One Gas | Enagas SA vs. NiSource |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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