Correlation Between Finnair Oyj and Citi Trends

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

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

Diversification Opportunities for Finnair Oyj and Citi Trends

-0.83

Correlation Coefficient

Finnair Oyj  Citi Trends

Pay attention - limited upside

The 3 months correlation between Finnair and Citi is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Citi Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citi Trends 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 Citi Trends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citi Trends has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Citi Trends go up and down completely randomly.

Pair Corralation between Finnair Oyj and Citi Trends

Assuming the 90 days horizon Finnair Oyj is expected to generate 0.86 times more return on investment than Citi Trends. However, Finnair Oyj is 1.17 times less risky than Citi Trends. It trades about 0.27 of its potential returns per unit of risk. Citi Trends is currently generating about -0.05 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	96.83%
Values	Daily Returns

Finnair Oyj  vs.  Citi Trends

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.

Citi Trends

Risk-Adjusted Performance

Very Weak

Over the last 90 days Citi Trends has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Finnair Oyj and Citi Trends

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

The idea behind Finnair Oyj and Citi Trends 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.