Correlation Between Finnair Oyj and Asure Software
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Asure Software 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 Asure Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Asure Software, you can compare the effects of market volatilities on Finnair Oyj and Asure Software 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 Asure Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Asure Software.
Diversification Opportunities for Finnair Oyj and Asure Software
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finnair and Asure is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software 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 Asure Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asure Software has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Asure Software go up and down completely randomly.
Pair Corralation between Finnair Oyj and Asure Software
Assuming the 90 days horizon Finnair Oyj is expected to generate 1.45 times more return on investment than Asure Software. However, Finnair Oyj is 1.45 times more volatile than Asure Software. It trades about 0.13 of its potential returns per unit of risk. Asure Software is currently generating about -0.18 per unit of risk. If you would invest 235.00 in Finnair Oyj on September 24, 2024 and sell it today you would earn a total of 15.00 from holding Finnair Oyj or generate 6.38% 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. Asure Software
Performance |
Timeline |
Finnair Oyj |
Asure Software |
Finnair Oyj and Asure Software Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Finnair Oyj and Asure Software
The main advantage of trading using opposite Finnair Oyj and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Asure Software 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 Asure Software will offset losses from the drop in Asure Software's long position.Finnair Oyj vs. Copa Holdings SA | Finnair Oyj vs. United Airlines Holdings | Finnair Oyj vs. Delta Air Lines | Finnair Oyj vs. SkyWest |
Asure Software vs. Dubber Limited | Asure Software vs. Advanced Health Intelligence | Asure Software vs. Danavation Technologies Corp | Asure Software vs. BASE Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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