Correlation Between Exel Composites and Sampo Oyj

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

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

Diversification Opportunities for Exel Composites and Sampo Oyj

0.49

Correlation Coefficient

Exel Composites  Sampo Oyj

Very weak diversification

The 3 months correlation between Exel and Sampo is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Exel Composites 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 Exel Composites 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 Exel Composites 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 Exel Composites i.e., Exel Composites and Sampo Oyj go up and down completely randomly.

Pair Corralation between Exel Composites and Sampo Oyj

Assuming the 90 days trading horizon Exel Composites Oyj is expected to under-perform the Sampo Oyj. In addition to that, Exel Composites is 4.32 times more volatile than Sampo Oyj A. It trades about -0.08 of its total potential returns per unit of risk. Sampo Oyj A is currently generating about 0.05 per unit of volatility. If you would invest  691.00  in Sampo Oyj A on December 1, 2024 and sell it today you would earn a total of  155.00  from holding Sampo Oyj A or generate 22.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Exel Composites Oyj  vs.  Sampo Oyj A

Exel Composites Oyj

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Exel Composites Oyj are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, Exel Composites demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Sampo Oyj A

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sampo Oyj A are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Sampo Oyj is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Exel Composites and Sampo Oyj

The main advantage of trading using opposite Exel Composites and Sampo Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exel Composites 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 Exel Composites 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.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.