Correlation Between Allianz SE and Sampo OYJ

Can any of the company-specific risk be diversified away by investing in both Allianz SE 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 Allianz SE and Sampo OYJ into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allianz SE ADR and Sampo OYJ, you can compare the effects of market volatilities on Allianz SE 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 Allianz SE with a short position of Sampo OYJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz SE and Sampo OYJ.

Diversification Opportunities for Allianz SE and Sampo OYJ

0.08

Correlation Coefficient

Allianz SE  Sampo OYJ

Significant diversification

The 3 months correlation between Allianz and Sampo is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Allianz SE ADR and Sampo OYJ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sampo OYJ and Allianz SE 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 Allianz SE ADR 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 has no effect on the direction of Allianz SE i.e., Allianz SE and Sampo OYJ go up and down completely randomly.

Pair Corralation between Allianz SE and Sampo OYJ

If you would invest  2,379  in Allianz SE ADR on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Allianz SE ADR or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Allianz SE ADR  vs.  Sampo OYJ

Allianz SE ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allianz SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Allianz SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sampo OYJ

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sampo OYJ has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Allianz SE and Sampo OYJ

The main advantage of trading using opposite Allianz SE and Sampo OYJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz SE 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 Allianz SE ADR and Sampo OYJ 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.