Correlation Between Sampo Oyj and CapMan Oyj
Can any of the company-specific risk be diversified away by investing in both Sampo Oyj and CapMan 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 CapMan 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 CapMan Oyj B, you can compare the effects of market volatilities on Sampo Oyj and CapMan 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 CapMan Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo Oyj and CapMan Oyj.
Diversification Opportunities for Sampo Oyj and CapMan Oyj
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sampo and CapMan is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sampo Oyj A and CapMan Oyj B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapMan 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 CapMan Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapMan Oyj B has no effect on the direction of Sampo Oyj i.e., Sampo Oyj and CapMan Oyj go up and down completely randomly.
Pair Corralation between Sampo Oyj and CapMan Oyj
Assuming the 90 days trading horizon Sampo Oyj A is expected to generate 0.72 times more return on investment than CapMan Oyj. However, Sampo Oyj A is 1.4 times less risky than CapMan Oyj. It trades about -0.02 of its potential returns per unit of risk. CapMan Oyj B is currently generating about -0.04 per unit of risk. If you would invest 4,080 in Sampo Oyj A on August 24, 2024 and sell it today you would lose (115.00) from holding Sampo Oyj A or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sampo Oyj A vs. CapMan Oyj B
Performance |
| Timeline |
| Sampo Oyj A |
| CapMan Oyj B |
Sampo Oyj and CapMan Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo Oyj and CapMan Oyj
The main advantage of trading using opposite Sampo Oyj and CapMan Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo Oyj position performs unexpectedly, CapMan 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 CapMan Oyj will offset losses from the drop in CapMan Oyj's long position.The idea behind Sampo Oyj A and CapMan Oyj B pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CapMan Oyj vs. Alandsbanken Abp A | CapMan Oyj vs. Sampo Oyj A | CapMan Oyj vs. Finnair Oyj | CapMan Oyj vs. KONE 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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