Correlation Between Sampo Oyj and Biohit Oyj
Can any of the company-specific risk be diversified away by investing in both Sampo Oyj and Biohit 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 Sampo Oyj and Biohit Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sampo Oyj A and Biohit Oyj B, you can compare the effects of market volatilities on Sampo Oyj and Biohit 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 Sampo Oyj with a short position of Biohit Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo Oyj and Biohit Oyj.
Diversification Opportunities for Sampo Oyj and Biohit Oyj
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sampo and Biohit is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sampo Oyj A and Biohit Oyj B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biohit Oyj B and Sampo 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 Sampo Oyj A are associated (or correlated) with Biohit Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biohit Oyj B has no effect on the direction of Sampo Oyj i.e., Sampo Oyj and Biohit Oyj go up and down completely randomly.
Pair Corralation between Sampo Oyj and Biohit Oyj
Assuming the 90 days trading horizon Sampo Oyj is expected to generate 5.84 times less return on investment than Biohit Oyj. But when comparing it to its historical volatility, Sampo Oyj A is 2.12 times less risky than Biohit Oyj. It trades about 0.02 of its potential returns per unit of risk. Biohit Oyj B is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 197.00 in Biohit Oyj B on August 30, 2024 and sell it today you would earn a total of 26.00 from holding Biohit Oyj B or generate 13.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sampo Oyj A vs. Biohit Oyj B
Performance |
| Timeline |
| Sampo Oyj A |
| Biohit Oyj B |
Sampo Oyj and Biohit Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo Oyj and Biohit Oyj
The main advantage of trading using opposite Sampo Oyj and Biohit Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo Oyj position performs unexpectedly, Biohit 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 Biohit Oyj will offset losses from the drop in Biohit Oyj's long position.| Sampo Oyj vs. Aktia Bank Abp | Sampo Oyj vs. Alandsbanken Abp A | Sampo Oyj vs. Oma Saastopankki Oyj | Sampo Oyj vs. Tokmanni Group Oyj |
| Biohit Oyj vs. Bittium Oyj | Biohit Oyj vs. Dovre Group Plc | Biohit Oyj vs. Afarak Group Oyj | Biohit Oyj vs. Tecnotree 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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