Correlation Between Sampo Oyj and Elecster Oyj
Can any of the company-specific risk be diversified away by investing in both Sampo Oyj and Elecster 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 Elecster 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 Elecster Oyj A, you can compare the effects of market volatilities on Sampo Oyj and Elecster 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 Elecster Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo Oyj and Elecster Oyj.
Diversification Opportunities for Sampo Oyj and Elecster Oyj
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sampo and Elecster is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sampo Oyj A and Elecster Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elecster Oyj A 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 Elecster Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elecster Oyj A has no effect on the direction of Sampo Oyj i.e., Sampo Oyj and Elecster Oyj go up and down completely randomly.
Pair Corralation between Sampo Oyj and Elecster Oyj
Assuming the 90 days trading horizon Sampo Oyj A is expected to under-perform the Elecster Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Sampo Oyj A is 5.56 times less risky than Elecster Oyj. The stock trades about -0.15 of its potential returns per unit of risk. The Elecster Oyj A is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 348.00 in Elecster Oyj A on August 30, 2024 and sell it today you would lose (2.00) from holding Elecster Oyj A or give up 0.57% 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. Elecster Oyj A
Performance |
| Timeline |
| Sampo Oyj A |
| Elecster Oyj A |
Sampo Oyj and Elecster Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo Oyj and Elecster Oyj
The main advantage of trading using opposite Sampo Oyj and Elecster Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo Oyj position performs unexpectedly, Elecster 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 Elecster Oyj will offset losses from the drop in Elecster 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 |
| Elecster Oyj vs. Raute Oyj | Elecster Oyj vs. Honkarakenne Oyj B | Elecster Oyj vs. Wulff Yhtiot Oy | Elecster Oyj vs. Biohit Oyj B |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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