Correlation Between SERI INDUSTRIAL and Sanoma Oyj
Can any of the company-specific risk be diversified away by investing in both SERI INDUSTRIAL and Sanoma 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 SERI INDUSTRIAL and Sanoma Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SERI INDUSTRIAL EO and Sanoma Oyj, you can compare the effects of market volatilities on SERI INDUSTRIAL and Sanoma 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 SERI INDUSTRIAL with a short position of Sanoma Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of SERI INDUSTRIAL and Sanoma Oyj.
Diversification Opportunities for SERI INDUSTRIAL and Sanoma Oyj
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SERI and Sanoma is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding SERI INDUSTRIAL EO and Sanoma Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanoma Oyj and SERI INDUSTRIAL 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 SERI INDUSTRIAL EO are associated (or correlated) with Sanoma Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanoma Oyj has no effect on the direction of SERI INDUSTRIAL i.e., SERI INDUSTRIAL and Sanoma Oyj go up and down completely randomly.
Pair Corralation between SERI INDUSTRIAL and Sanoma Oyj
Assuming the 90 days trading horizon SERI INDUSTRIAL EO is expected to under-perform the Sanoma Oyj. In addition to that, SERI INDUSTRIAL is 3.08 times more volatile than Sanoma Oyj. It trades about -0.01 of its total potential returns per unit of risk. Sanoma Oyj is currently generating about 0.13 per unit of volatility. If you would invest 671.00 in Sanoma Oyj on August 31, 2024 and sell it today you would earn a total of 36.00 from holding Sanoma Oyj or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SERI INDUSTRIAL EO vs. Sanoma Oyj
Performance |
| Timeline |
| SERI INDUSTRIAL EO |
| Sanoma Oyj |
SERI INDUSTRIAL and Sanoma Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SERI INDUSTRIAL and Sanoma Oyj
The main advantage of trading using opposite SERI INDUSTRIAL and Sanoma Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SERI INDUSTRIAL position performs unexpectedly, Sanoma 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 Sanoma Oyj will offset losses from the drop in Sanoma Oyj's long position.| SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc |
| Sanoma Oyj vs. Seven West Media | Sanoma Oyj vs. Zijin Mining Group | Sanoma Oyj vs. Hollywood Bowl Group | Sanoma Oyj vs. SERI INDUSTRIAL EO |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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