Correlation Between Sampo Oyj and YIT Oyj
Can any of the company-specific risk be diversified away by investing in both Sampo Oyj and YIT 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 YIT 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 YIT Oyj, you can compare the effects of market volatilities on Sampo Oyj and YIT 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 YIT Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo Oyj and YIT Oyj.
Diversification Opportunities for Sampo Oyj and YIT Oyj
Weak diversification
The 3 months correlation between Sampo and YIT is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sampo Oyj A and YIT Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YIT Oyj 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 YIT Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YIT Oyj has no effect on the direction of Sampo Oyj i.e., Sampo Oyj and YIT Oyj go up and down completely randomly.
Pair Corralation between Sampo Oyj and YIT Oyj
Assuming the 90 days trading horizon Sampo Oyj is expected to generate 4.62 times less return on investment than YIT Oyj. But when comparing it to its historical volatility, Sampo Oyj A is 2.41 times less risky than YIT Oyj. It trades about 0.03 of its potential returns per unit of risk. YIT Oyj is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 192.00 in YIT Oyj on August 25, 2024 and sell it today you would earn a total of 59.00 from holding YIT Oyj or generate 30.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sampo Oyj A vs. YIT Oyj
Performance |
| Timeline |
| Sampo Oyj A |
| YIT Oyj |
Sampo Oyj and YIT Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo Oyj and YIT Oyj
The main advantage of trading using opposite Sampo Oyj and YIT Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo Oyj position performs unexpectedly, YIT 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 YIT Oyj will offset losses from the drop in YIT Oyj'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 |
| YIT Oyj vs. Aktia Bank Abp | YIT Oyj vs. Alandsbanken Abp B | YIT Oyj vs. Alandsbanken Abp A | YIT Oyj vs. Sampo Oyj A |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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