Correlation Between Sampo OYJ and Mapfre SA
Can any of the company-specific risk be diversified away by investing in both Sampo OYJ and Mapfre 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 Mapfre 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 Mapfre SA ADR, you can compare the effects of market volatilities on Sampo OYJ and Mapfre 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 Mapfre SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo OYJ and Mapfre SA.
Diversification Opportunities for Sampo OYJ and Mapfre SA
Very good diversification
The 3 months correlation between Sampo and Mapfre is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sampo OYJ and Mapfre SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapfre SA ADR 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 Mapfre SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapfre SA ADR has no effect on the direction of Sampo OYJ i.e., Sampo OYJ and Mapfre SA go up and down completely randomly.
Pair Corralation between Sampo OYJ and Mapfre SA
Assuming the 90 days horizon Sampo OYJ is expected to generate 0.26 times more return on investment than Mapfre SA. However, Sampo OYJ is 3.79 times less risky than Mapfre SA. It trades about -0.16 of its potential returns per unit of risk. Mapfre SA ADR is currently generating about -0.07 per unit of risk. If you would invest 2,122 in Sampo OYJ on September 19, 2024 and sell it today you would lose (75.00) from holding Sampo OYJ or give up 3.53% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sampo OYJ vs. Mapfre SA ADR
Performance |
Timeline |
Sampo OYJ |
Mapfre SA ADR |
Sampo OYJ and Mapfre SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sampo OYJ and Mapfre SA
The main advantage of trading using opposite Sampo OYJ and Mapfre SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo OYJ position performs unexpectedly, Mapfre 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 Mapfre SA will offset losses from the drop in Mapfre SA's long position.Sampo OYJ vs. Berkshire Hathaway | Sampo OYJ vs. Berkshire Hathaway | Sampo OYJ vs. Zurich Insurance Group | Sampo OYJ vs. AXA SA |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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