Correlation Between Sampo OYJ and Old Republic
Can any of the company-specific risk be diversified away by investing in both Sampo OYJ and Old Republic 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 Old Republic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sampo OYJ and Old Republic International, you can compare the effects of market volatilities on Sampo OYJ and Old Republic 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 Old Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo OYJ and Old Republic.
Diversification Opportunities for Sampo OYJ and Old Republic
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sampo and Old is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sampo OYJ and Old Republic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Republic Interna 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 Old Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Republic Interna has no effect on the direction of Sampo OYJ i.e., Sampo OYJ and Old Republic go up and down completely randomly.
Pair Corralation between Sampo OYJ and Old Republic
Assuming the 90 days horizon Sampo OYJ is expected to generate 23.4 times less return on investment than Old Republic. In addition to that, Sampo OYJ is 1.27 times more volatile than Old Republic International. It trades about 0.0 of its total potential returns per unit of risk. Old Republic International is currently generating about 0.09 per unit of volatility. If you would invest 2,354 in Old Republic International on August 28, 2024 and sell it today you would earn a total of 1,526 from holding Old Republic International or generate 64.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Sampo OYJ vs. Old Republic International
Performance |
| Timeline |
| Sampo OYJ |
| Old Republic Interna |
Sampo OYJ and Old Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo OYJ and Old Republic
The main advantage of trading using opposite Sampo OYJ and Old Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo OYJ position performs unexpectedly, Old Republic 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 Old Republic will offset losses from the drop in Old Republic's long position.The idea behind Sampo OYJ and Old Republic International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Old Republic vs. Axa Equitable Holdings | Old Republic vs. American International Group | Old Republic vs. Arch Capital Group | Old Republic vs. Sun Life Financial |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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