Correlation Between Uponor Oyj and Sampo Oyj
Can any of the company-specific risk be diversified away by investing in both Uponor Oyj and Sampo 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 Uponor Oyj and Sampo Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uponor Oyj and Sampo Oyj A, you can compare the effects of market volatilities on Uponor Oyj and Sampo 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 Uponor Oyj with a short position of Sampo Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uponor Oyj and Sampo Oyj.
Diversification Opportunities for Uponor Oyj and Sampo Oyj
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Uponor and Sampo is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Uponor Oyj and Sampo Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sampo Oyj A and Uponor 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 Uponor Oyj are associated (or correlated) with Sampo Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sampo Oyj A has no effect on the direction of Uponor Oyj i.e., Uponor Oyj and Sampo Oyj go up and down completely randomly.
Pair Corralation between Uponor Oyj and Sampo Oyj
Assuming the 90 days trading horizon Uponor Oyj is expected to generate 6.4 times less return on investment than Sampo Oyj. But when comparing it to its historical volatility, Uponor Oyj is 14.32 times less risky than Sampo Oyj. It trades about 0.09 of its potential returns per unit of risk. Sampo Oyj A is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,785 in Sampo Oyj A on February 7, 2024 and sell it today you would earn a total of 43.00 from holding Sampo Oyj A or generate 1.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 80.95% |
Values | Daily Returns |
Uponor Oyj vs. Sampo Oyj A
Performance |
Timeline |
Uponor Oyj |
Sampo Oyj A |
Uponor Oyj and Sampo Oyj Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Uponor Oyj and Sampo Oyj
The main advantage of trading using opposite Uponor Oyj and Sampo Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uponor Oyj position performs unexpectedly, Sampo 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 Sampo Oyj will offset losses from the drop in Sampo Oyj's long position.The idea behind Uponor Oyj and Sampo Oyj A 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.Sampo Oyj vs. Nordea Bank Abp | Sampo Oyj vs. Fortum Oyj | Sampo Oyj vs. UPM Kymmene Oyj | Sampo Oyj vs. Neste Oil Oyj |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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