Correlation Between Raute Oyj and Sampo Oyj
Can any of the company-specific risk be diversified away by investing in both Raute 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 Raute 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 Raute Oyj and Sampo Oyj A, you can compare the effects of market volatilities on Raute 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 Raute Oyj with a short position of Sampo Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raute Oyj and Sampo Oyj.
Diversification Opportunities for Raute Oyj and Sampo Oyj
Very good diversification
The 3 months correlation between Raute and Sampo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Raute 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 Raute 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 Raute 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 Raute Oyj i.e., Raute Oyj and Sampo Oyj go up and down completely randomly.
Pair Corralation between Raute Oyj and Sampo Oyj
Assuming the 90 days trading horizon Raute Oyj is expected to generate 2.31 times more return on investment than Sampo Oyj. However, Raute Oyj is 2.31 times more volatile than Sampo Oyj A. It trades about -0.04 of its potential returns per unit of risk. Sampo Oyj A is currently generating about -0.16 per unit of risk. If you would invest 1,275 in Raute Oyj on August 27, 2024 and sell it today you would lose (25.00) from holding Raute Oyj or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raute Oyj vs. Sampo Oyj A
Performance |
| Timeline |
| Raute Oyj |
| Sampo Oyj A |
Raute Oyj and Sampo Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raute Oyj and Sampo Oyj
The main advantage of trading using opposite Raute Oyj and Sampo Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raute 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.| Raute Oyj vs. Aktia Bank Abp | Raute Oyj vs. Alandsbanken Abp B | Raute Oyj vs. Alandsbanken Abp A | Raute Oyj vs. Sampo Oyj A |
| Sampo Oyj vs. Nordea Bank Abp | Sampo Oyj vs. Fortum Oyj | Sampo Oyj vs. UPM Kymmene Oyj | Sampo Oyj vs. Neste Oil Oyj |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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