Correlation Between Sampo OYJ and Hartford Financial
Can any of the company-specific risk be diversified away by investing in both Sampo OYJ and Hartford Financial 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 Hartford Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sampo OYJ and Hartford Financial Services, you can compare the effects of market volatilities on Sampo OYJ and Hartford Financial 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 Hartford Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sampo OYJ and Hartford Financial.
Diversification Opportunities for Sampo OYJ and Hartford Financial
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sampo and Hartford is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sampo OYJ and Hartford Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Financial 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 are associated (or correlated) with Hartford Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Financial has no effect on the direction of Sampo OYJ i.e., Sampo OYJ and Hartford Financial go up and down completely randomly.
Pair Corralation between Sampo OYJ and Hartford Financial
Assuming the 90 days horizon Sampo OYJ is expected to under-perform the Hartford Financial. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sampo OYJ is 1.31 times less risky than Hartford Financial. The pink sheet trades about -0.15 of its potential returns per unit of risk. The Hartford Financial Services is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 10,055 in Hartford Financial Services on January 21, 2024 and sell it today you would lose (160.00) from holding Hartford Financial Services or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sampo OYJ vs. Hartford Financial Services
Performance |
| Timeline |
| Sampo OYJ |
| Hartford Financial |
Sampo OYJ and Hartford Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sampo OYJ and Hartford Financial
The main advantage of trading using opposite Sampo OYJ and Hartford Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sampo OYJ position performs unexpectedly, Hartford Financial 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 Hartford Financial will offset losses from the drop in Hartford Financial's long position.| Sampo OYJ vs. Berkshire Hathaway | Sampo OYJ vs. Berkshire Hathaway | Sampo OYJ vs. American International Group |
| Hartford Financial vs. Global Indemnity PLC | Hartford Financial vs. Selective Insurance Group | Hartford Financial vs. Kemper | Hartford Financial vs. Stewart Information Services |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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