Correlation Between Finnair Oyj and Agilent Technologies

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

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

Diversification Opportunities for Finnair Oyj and Agilent Technologies

-0.75

Correlation Coefficient

Finnair Oyj  Agilent Technologies

Pay attention - limited upside

The 3 months correlation between Finnair and Agilent is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Finnair 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 Finnair Oyj are associated (or correlated) with Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Agilent Technologies go up and down completely randomly.

Pair Corralation between Finnair Oyj and Agilent Technologies

Assuming the 90 days trading horizon Finnair Oyj is expected to generate 2.05 times more return on investment than Agilent Technologies. However, Finnair Oyj is 2.05 times more volatile than Agilent Technologies. It trades about 0.25 of its potential returns per unit of risk. Agilent Technologies is currently generating about -0.1 per unit of risk. If you would invest  221.00  in Finnair Oyj on December 23, 2024 and sell it today you would earn a total of  147.00  from holding Finnair Oyj or generate 66.52% return on investment over 90 days.

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

Finnair Oyj  vs.  Agilent Technologies

Finnair Oyj

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Finnair Oyj are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Finnair Oyj unveiled solid returns over the last few months and may actually be approaching a breakup point.

Agilent Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agilent Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Finnair Oyj and Agilent Technologies

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

The idea behind Finnair Oyj and Agilent Technologies 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.