Correlation Between Terveystalo and Sampo Oyj

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

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

Diversification Opportunities for Terveystalo and Sampo Oyj

-0.33

Correlation Coefficient

Terveystalo  Sampo Oyj

Very good diversification

The 3 months correlation between Terveystalo and Sampo is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Terveystalo Oy 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 Terveystalo 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 Terveystalo Oy 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 Terveystalo i.e., Terveystalo and Sampo Oyj go up and down completely randomly.

Pair Corralation between Terveystalo and Sampo Oyj

Assuming the 90 days trading horizon Terveystalo Oy is expected to generate 2.25 times more return on investment than Sampo Oyj. However, Terveystalo is 2.25 times more volatile than Sampo Oyj A. It trades about 0.01 of its potential returns per unit of risk. Sampo Oyj A is currently generating about -0.17 per unit of risk. If you would invest  1,072  in Terveystalo Oy on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Terveystalo Oy or generate 0.0% return on investment over 90 days.

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

Terveystalo Oy  vs.  Sampo Oyj A

Terveystalo Oy

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Terveystalo Oy are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Terveystalo demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Terveystalo and Sampo Oyj

The main advantage of trading using opposite Terveystalo and Sampo Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terveystalo 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 Terveystalo Oy 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.