Correlation Between Vastned Retail and Sanoma Oyj
Can any of the company-specific risk be diversified away by investing in both Vastned Retail and Sanoma 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 Vastned Retail and Sanoma Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vastned Retail NV and Sanoma Oyj, you can compare the effects of market volatilities on Vastned Retail and Sanoma 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 Vastned Retail with a short position of Sanoma Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and Sanoma Oyj.
Diversification Opportunities for Vastned Retail and Sanoma Oyj
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vastned and Sanoma is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and Sanoma Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanoma Oyj and Vastned Retail 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 Vastned Retail NV are associated (or correlated) with Sanoma Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanoma Oyj has no effect on the direction of Vastned Retail i.e., Vastned Retail and Sanoma Oyj go up and down completely randomly.
Pair Corralation between Vastned Retail and Sanoma Oyj
Assuming the 90 days horizon Vastned Retail NV is expected to under-perform the Sanoma Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Vastned Retail NV is 2.01 times less risky than Sanoma Oyj. The stock trades about -0.04 of its potential returns per unit of risk. The Sanoma Oyj is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 626.00 in Sanoma Oyj on September 12, 2024 and sell it today you would earn a total of 101.00 from holding Sanoma Oyj or generate 16.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Vastned Retail NV vs. Sanoma Oyj
Performance |
| Timeline |
| Vastned Retail NV |
| Sanoma Oyj |
Vastned Retail and Sanoma Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastned Retail and Sanoma Oyj
The main advantage of trading using opposite Vastned Retail and Sanoma Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail position performs unexpectedly, Sanoma 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 Sanoma Oyj will offset losses from the drop in Sanoma Oyj's long position.| Vastned Retail vs. Guidewire Software | Vastned Retail vs. Evolution Mining Limited | Vastned Retail vs. TAL Education Group | Vastned Retail vs. MAGIC SOFTWARE ENTR |
| Sanoma Oyj vs. Commercial Vehicle Group | Sanoma Oyj vs. Lamar Advertising | Sanoma Oyj vs. CODERE ONLINE LUX | Sanoma Oyj vs. FUYO GENERAL LEASE |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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