Correlation Between Herantis Pharma and Sampo Oyj

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

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

Diversification Opportunities for Herantis Pharma and Sampo Oyj

-0.13

Correlation Coefficient

Herantis Pharma  Sampo Oyj

Good diversification

The 3 months correlation between Herantis and Sampo is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Herantis Pharma 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 Herantis Pharma 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 Herantis Pharma 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 Herantis Pharma i.e., Herantis Pharma and Sampo Oyj go up and down completely randomly.

Pair Corralation between Herantis Pharma and Sampo Oyj

Assuming the 90 days trading horizon Herantis Pharma Oyj is expected to generate 3.47 times more return on investment than Sampo Oyj. However, Herantis Pharma is 3.47 times more volatile than Sampo Oyj A. It trades about 0.03 of its potential returns per unit of risk. Sampo Oyj A is currently generating about -0.13 per unit of risk. If you would invest  144.00  in Herantis Pharma Oyj on September 29, 2024 and sell it today you would earn a total of  5.00  from holding Herantis Pharma Oyj or generate 3.47% return on investment over 90 days.

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

Herantis Pharma Oyj  vs.  Sampo Oyj A

Herantis Pharma Oyj

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Herantis Pharma Oyj are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Herantis Pharma is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

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 latest inconsistent performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Herantis Pharma and Sampo Oyj

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

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..