Correlation Between Sampo OYJ and BB Seguridade
Can any of the company-specific risk be diversified away by investing in both Sampo OYJ and BB Seguridade 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 BB Seguridade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sampo OYJ and BB Seguridade Participacoes, you can compare the effects of market volatilities on Sampo OYJ and BB Seguridade 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 BB Seguridade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo OYJ and BB Seguridade.
Diversification Opportunities for Sampo OYJ and BB Seguridade
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sampo and BBSEY is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sampo OYJ and BB Seguridade Participacoes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Seguridade Partic 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 are associated (or correlated) with BB Seguridade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Seguridade Partic has no effect on the direction of Sampo OYJ i.e., Sampo OYJ and BB Seguridade go up and down completely randomly.
Pair Corralation between Sampo OYJ and BB Seguridade
Assuming the 90 days horizon Sampo OYJ is expected to generate 0.45 times more return on investment than BB Seguridade. However, Sampo OYJ is 2.23 times less risky than BB Seguridade. It trades about -0.27 of its potential returns per unit of risk. BB Seguridade Participacoes is currently generating about -0.15 per unit of risk. If you would invest 2,235 in Sampo OYJ on September 2, 2024 and sell it today you would lose (102.00) from holding Sampo OYJ or give up 4.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sampo OYJ vs. BB Seguridade Participacoes
Performance |
| Timeline |
| Sampo OYJ |
| BB Seguridade Partic |
Sampo OYJ and BB Seguridade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo OYJ and BB Seguridade
The main advantage of trading using opposite Sampo OYJ and BB Seguridade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo OYJ position performs unexpectedly, BB Seguridade 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 BB Seguridade will offset losses from the drop in BB Seguridade's long position.| Sampo OYJ vs. ageas SANV | Sampo OYJ vs. Athene Holding | Sampo OYJ vs. Athene Holding | Sampo OYJ vs. The Hartford Financial |
| BB Seguridade vs. ageas SANV | BB Seguridade vs. Athene Holding | BB Seguridade vs. Sampo OYJ | BB Seguridade vs. Athene Holding |
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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