Correlation Between Assicurazioni Generali and Sampo Oyj

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

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

Diversification Opportunities for Assicurazioni Generali and Sampo Oyj

-0.29

Correlation Coefficient

Assicurazioni Generali  Sampo Oyj

Very good diversification

The 3 months correlation between Assicurazioni and Sampo is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Assicurazioni Generali SpA and Sampo Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sampo Oyj and Assicurazioni Generali 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 Assicurazioni Generali SpA 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 has no effect on the direction of Assicurazioni Generali i.e., Assicurazioni Generali and Sampo Oyj go up and down completely randomly.

Pair Corralation between Assicurazioni Generali and Sampo Oyj

Assuming the 90 days horizon Assicurazioni Generali SpA is expected to generate 1.52 times more return on investment than Sampo Oyj. However, Assicurazioni Generali is 1.52 times more volatile than Sampo Oyj. It trades about 0.12 of its potential returns per unit of risk. Sampo Oyj is currently generating about 0.06 per unit of risk. If you would invest  2,187  in Assicurazioni Generali SpA on January 24, 2024 and sell it today you would earn a total of  313.00  from holding Assicurazioni Generali SpA or generate 14.31% return on investment over 90 days.

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

Assicurazioni Generali SpA  vs.  Sampo Oyj

Assicurazioni Generali

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Assicurazioni Generali SpA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Assicurazioni Generali reported solid returns over the last few months and may actually be approaching a breakup point.

Sampo Oyj

Risk-Adjusted Performance

4 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sampo Oyj are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Sampo Oyj is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Assicurazioni Generali and Sampo Oyj

The main advantage of trading using opposite Assicurazioni Generali and Sampo Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assicurazioni Generali 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 Assicurazioni Generali SpA and Sampo 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.