Correlation Between Sampo OYJ and Enagas SA
Can any of the company-specific risk be diversified away by investing in both Sampo OYJ and Enagas SA 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 Enagas SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sampo OYJ and Enagas SA, you can compare the effects of market volatilities on Sampo OYJ and Enagas SA 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 Enagas SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo OYJ and Enagas SA.
Diversification Opportunities for Sampo OYJ and Enagas SA
Almost no diversification
The 3 months correlation between Sampo and Enagas is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Sampo OYJ and Enagas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enagas SA 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 Enagas SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enagas SA has no effect on the direction of Sampo OYJ i.e., Sampo OYJ and Enagas SA go up and down completely randomly.
Pair Corralation between Sampo OYJ and Enagas SA
Assuming the 90 days horizon Sampo OYJ is expected to generate 1.61 times less return on investment than Enagas SA. But when comparing it to its historical volatility, Sampo OYJ is 1.12 times less risky than Enagas SA. It trades about 0.12 of its potential returns per unit of risk. Enagas SA is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 601.00 in Enagas SA on October 29, 2024 and sell it today you would earn a total of 22.00 from holding Enagas SA or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Sampo OYJ vs. Enagas SA
Performance |
| Timeline |
| Sampo OYJ |
| Enagas SA |
Sampo OYJ and Enagas SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo OYJ and Enagas SA
The main advantage of trading using opposite Sampo OYJ and Enagas SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo OYJ position performs unexpectedly, Enagas SA 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 Enagas SA will offset losses from the drop in Enagas SA's long position.| Sampo OYJ vs. iA Financial | Sampo OYJ vs. Sun Life Financial | Sampo OYJ vs. Athene Holding | Sampo OYJ vs. Assicurazioni Generali SpA |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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