Correlation Between Finnair Oyj and CAVA Group,

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

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

Diversification Opportunities for Finnair Oyj and CAVA Group,

-0.85

Correlation Coefficient

Finnair Oyj  CAVA Group,

Pay attention - limited upside

The 3 months correlation between Finnair and CAVA is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and CAVA Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAVA Group, 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 CAVA Group,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAVA Group, has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and CAVA Group, go up and down completely randomly.

Pair Corralation between Finnair Oyj and CAVA Group,

Assuming the 90 days horizon Finnair Oyj is expected to generate 0.83 times more return on investment than CAVA Group,. However, Finnair Oyj is 1.21 times less risky than CAVA Group,. It trades about 0.27 of its potential returns per unit of risk. CAVA Group, is currently generating about -0.08 per unit of risk. If you would invest  235.00  in Finnair Oyj on December 28, 2024 and sell it today you would earn a total of  164.00  from holding Finnair Oyj or generate 69.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Finnair Oyj  vs.  CAVA Group,

Finnair Oyj

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Finnair Oyj are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Finnair Oyj reported solid returns over the last few months and may actually be approaching a breakup point.

CAVA Group,

Risk-Adjusted Performance

Very Weak

Over the last 90 days CAVA Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Finnair Oyj and CAVA Group,

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

The idea behind Finnair Oyj and CAVA Group, 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.