Correlation Between China Electric and Sampo Corp

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both China Electric and Sampo Corp 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 China Electric and Sampo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Electric Manufacturing and Sampo Corp, you can compare the effects of market volatilities on China Electric and Sampo Corp 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 China Electric with a short position of Sampo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Electric and Sampo Corp.

Diversification Opportunities for China Electric and Sampo Corp

-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between China and Sampo is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding China Electric Manufacturing and Sampo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sampo Corp and China Electric 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 China Electric Manufacturing are associated (or correlated) with Sampo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sampo Corp has no effect on the direction of China Electric i.e., China Electric and Sampo Corp go up and down completely randomly.

Pair Corralation between China Electric and Sampo Corp

Assuming the 90 days trading horizon China Electric Manufacturing is expected to under-perform the Sampo Corp. In addition to that, China Electric is 3.6 times more volatile than Sampo Corp. It trades about -0.06 of its total potential returns per unit of risk. Sampo Corp is currently generating about 0.02 per unit of volatility. If you would invest  2,800  in Sampo Corp on September 15, 2024 and sell it today you would earn a total of  20.00  from holding Sampo Corp or generate 0.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

China Electric Manufacturing  vs.  Sampo Corp

 Performance 
       Timeline  
China Electric Manuf 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days China Electric Manufacturing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.
Sampo Corp 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Sampo Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Sampo Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

China Electric and Sampo Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with China Electric and Sampo Corp

The main advantage of trading using opposite China Electric and Sampo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Electric position performs unexpectedly, Sampo Corp 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 Corp will offset losses from the drop in Sampo Corp's long position.
The idea behind China Electric Manufacturing and Sampo Corp 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.
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

Other Complementary Tools

Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine