Correlation Between Kemira Oyj and Sampo Oyj
Can any of the company-specific risk be diversified away by investing in both Kemira Oyj 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 Kemira Oyj and Sampo Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kemira Oyj and Sampo Oyj A, you can compare the effects of market volatilities on Kemira Oyj 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 Kemira Oyj with a short position of Sampo Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kemira Oyj and Sampo Oyj.
Diversification Opportunities for Kemira Oyj and Sampo Oyj
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kemira and Sampo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kemira Oyj and Sampo Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sampo Oyj A and Kemira Oyj 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 Kemira Oyj 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 A has no effect on the direction of Kemira Oyj i.e., Kemira Oyj and Sampo Oyj go up and down completely randomly.
Pair Corralation between Kemira Oyj and Sampo Oyj
Assuming the 90 days trading horizon Kemira Oyj is expected to under-perform the Sampo Oyj. In addition to that, Kemira Oyj is 1.66 times more volatile than Sampo Oyj A. It trades about -0.18 of its total potential returns per unit of risk. Sampo Oyj A is currently generating about -0.02 per unit of volatility. If you would invest 4,070 in Sampo Oyj A on September 1, 2024 and sell it today you would lose (16.00) from holding Sampo Oyj A or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kemira Oyj vs. Sampo Oyj A
Performance |
| Timeline |
| Kemira Oyj |
| Sampo Oyj A |
Kemira Oyj and Sampo Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kemira Oyj and Sampo Oyj
The main advantage of trading using opposite Kemira Oyj and Sampo Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kemira Oyj 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.| Kemira Oyj vs. Sampo Oyj A | Kemira Oyj vs. Fortum Oyj | Kemira Oyj vs. Nordea Bank Abp | Kemira Oyj vs. Stora Enso Oyj |
| Sampo Oyj vs. Nordea Bank Abp | Sampo Oyj vs. Telia Company AB | Sampo Oyj vs. Fortum Oyj | Sampo Oyj vs. SSAB AB ser |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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