Correlation Between Sampo Oyj and NoHo Partners

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

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

Diversification Opportunities for Sampo Oyj and NoHo Partners

-0.41

Correlation Coefficient

Sampo Oyj  NoHo Partners

Very good diversification

The 3 months correlation between Sampo and NoHo is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sampo Oyj A and NoHo Partners Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NoHo Partners Oyj and Sampo 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 Sampo Oyj A are associated (or correlated) with NoHo Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NoHo Partners Oyj has no effect on the direction of Sampo Oyj i.e., Sampo Oyj and NoHo Partners go up and down completely randomly.

Pair Corralation between Sampo Oyj and NoHo Partners

Assuming the 90 days trading horizon Sampo Oyj A is expected to under-perform the NoHo Partners. But the stock apears to be less risky and, when comparing its historical volatility, Sampo Oyj A is 2.15 times less risky than NoHo Partners. The stock trades about -0.19 of its potential returns per unit of risk. The NoHo Partners Oyj is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  754.00  in NoHo Partners Oyj on October 11, 2024 and sell it today you would earn a total of  48.00  from holding NoHo Partners Oyj or generate 6.37% return on investment over 90 days.

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

Sampo Oyj A  vs.  NoHo Partners Oyj

Sampo Oyj A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sampo Oyj A has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

NoHo Partners Oyj

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NoHo Partners Oyj are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical and fundamental indicators, NoHo Partners may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Sampo Oyj and NoHo Partners

The main advantage of trading using opposite Sampo Oyj and NoHo Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo Oyj position performs unexpectedly, NoHo Partners 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 NoHo Partners will offset losses from the drop in NoHo Partners' long position.

The idea behind Sampo Oyj A and NoHo Partners 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.