Correlation Between Finnair Oyj and Apple

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

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

Diversification Opportunities for Finnair Oyj and Apple

0.14

Correlation Coefficient

Finnair Oyj  Apple

Average diversification

The 3 months correlation between Finnair and Apple is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Apple go up and down completely randomly.

Pair Corralation between Finnair Oyj and Apple

Assuming the 90 days trading horizon Finnair Oyj is expected to generate 1.04 times more return on investment than Apple. However, Finnair Oyj is 1.04 times more volatile than Apple Inc. It trades about 0.26 of its potential returns per unit of risk. Apple Inc is currently generating about 0.02 per unit of risk. If you would invest  211.00  in Finnair Oyj on December 3, 2024 and sell it today you would earn a total of  141.00  from holding Finnair Oyj or generate 66.82% return on investment over 90 days.

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

Finnair Oyj  vs.  Apple Inc

Finnair Oyj

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Finnair Oyj are ranked lower than 20 (%) 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.

Apple Inc

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Apple is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Finnair Oyj and Apple

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

The idea behind Finnair Oyj and Apple Inc 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.