Correlation Between Finnair Oyj and Rightmove PLC
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Rightmove PLC 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 Rightmove PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Rightmove PLC, you can compare the effects of market volatilities on Finnair Oyj and Rightmove PLC 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 Rightmove PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Rightmove PLC.
Diversification Opportunities for Finnair Oyj and Rightmove PLC
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finnair and Rightmove is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Rightmove PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rightmove PLC 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 Rightmove PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rightmove PLC has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Rightmove PLC go up and down completely randomly.
Pair Corralation between Finnair Oyj and Rightmove PLC
Assuming the 90 days trading horizon Finnair Oyj is expected to generate 3.08 times more return on investment than Rightmove PLC. However, Finnair Oyj is 3.08 times more volatile than Rightmove PLC. It trades about 0.02 of its potential returns per unit of risk. Rightmove PLC is currently generating about -0.24 per unit of risk. If you would invest 233.00 in Finnair Oyj on October 8, 2024 and sell it today you would earn a total of 1.00 from holding Finnair Oyj or generate 0.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Finnair Oyj vs. Rightmove PLC
Performance |
Timeline |
Finnair Oyj |
Rightmove PLC |
Finnair Oyj and Rightmove PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Finnair Oyj and Rightmove PLC
The main advantage of trading using opposite Finnair Oyj and Rightmove PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Rightmove PLC 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 Rightmove PLC will offset losses from the drop in Rightmove PLC's long position.Finnair Oyj vs. Walmart | Finnair Oyj vs. BYD Co | Finnair Oyj vs. Volkswagen AG | Finnair Oyj vs. Volkswagen AG Non Vtg |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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