Correlation Between Sampo Oyj and Terveystalo
Can any of the company-specific risk be diversified away by investing in both Sampo Oyj and Terveystalo 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 Terveystalo 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 Terveystalo Oy, you can compare the effects of market volatilities on Sampo Oyj and Terveystalo 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 Terveystalo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo Oyj and Terveystalo.
Diversification Opportunities for Sampo Oyj and Terveystalo
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sampo and Terveystalo is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sampo Oyj A and Terveystalo Oy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terveystalo Oy 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 Terveystalo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terveystalo Oy has no effect on the direction of Sampo Oyj i.e., Sampo Oyj and Terveystalo go up and down completely randomly.
Pair Corralation between Sampo Oyj and Terveystalo
Assuming the 90 days trading horizon Sampo Oyj is expected to generate 7.5 times less return on investment than Terveystalo. But when comparing it to its historical volatility, Sampo Oyj A is 1.59 times less risky than Terveystalo. It trades about 0.02 of its potential returns per unit of risk. Terveystalo Oy is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 732.00 in Terveystalo Oy on September 14, 2024 and sell it today you would earn a total of 336.00 from holding Terveystalo Oy or generate 45.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Sampo Oyj A vs. Terveystalo Oy
Performance |
| Timeline |
| Sampo Oyj A |
| Terveystalo Oy |
Sampo Oyj and Terveystalo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo Oyj and Terveystalo
The main advantage of trading using opposite Sampo Oyj and Terveystalo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo Oyj position performs unexpectedly, Terveystalo 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 Terveystalo will offset losses from the drop in Terveystalo's long position.| Sampo Oyj vs. Tecnotree Oyj | Sampo Oyj vs. Aspo Oyj | Sampo Oyj vs. Finnair Oyj | Sampo Oyj vs. Tulikivi Oyj A |
| Terveystalo vs. Sampo Oyj A | Terveystalo vs. UPM Kymmene Oyj | Terveystalo vs. Wartsila Oyj Abp | Terveystalo vs. Elisa 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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