Correlation Between Sampo Oyj and Konecranes Plc
Can any of the company-specific risk be diversified away by investing in both Sampo Oyj and Konecranes Plc 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 Konecranes Plc 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 Konecranes Plc, you can compare the effects of market volatilities on Sampo Oyj and Konecranes Plc 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 Konecranes Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo Oyj and Konecranes Plc.
Diversification Opportunities for Sampo Oyj and Konecranes Plc
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sampo and Konecranes is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sampo Oyj A and Konecranes Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konecranes Plc 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 Konecranes Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konecranes Plc has no effect on the direction of Sampo Oyj i.e., Sampo Oyj and Konecranes Plc go up and down completely randomly.
Pair Corralation between Sampo Oyj and Konecranes Plc
Assuming the 90 days trading horizon Sampo Oyj A is expected to under-perform the Konecranes Plc. But the stock apears to be less risky and, when comparing its historical volatility, Sampo Oyj A is 1.98 times less risky than Konecranes Plc. The stock trades about -0.12 of its potential returns per unit of risk. The Konecranes Plc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,300 in Konecranes Plc on August 28, 2024 and sell it today you would earn a total of 75.00 from holding Konecranes Plc or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sampo Oyj A vs. Konecranes Plc
Performance |
| Timeline |
| Sampo Oyj A |
| Konecranes Plc |
Sampo Oyj and Konecranes Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo Oyj and Konecranes Plc
The main advantage of trading using opposite Sampo Oyj and Konecranes Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo Oyj position performs unexpectedly, Konecranes Plc 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 Konecranes Plc will offset losses from the drop in Konecranes Plc's long position.| Sampo Oyj vs. Nordea Bank Abp | Sampo Oyj vs. Fortum Oyj | Sampo Oyj vs. UPM Kymmene Oyj | Sampo Oyj vs. Neste Oil Oyj |
| Konecranes Plc vs. Cargotec Oyj | Konecranes Plc vs. Sampo Oyj A | Konecranes Plc vs. Wartsila Oyj Abp | Konecranes Plc vs. Valmet 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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