Correlation Between Finnair Oyj and Duluth Holdings

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

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

Diversification Opportunities for Finnair Oyj and Duluth Holdings

0.23

Correlation Coefficient

Finnair Oyj  Duluth Holdings

Modest diversification

The 3 months correlation between Finnair and Duluth is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Duluth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duluth Holdings 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 Duluth Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duluth Holdings has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Duluth Holdings go up and down completely randomly.

Pair Corralation between Finnair Oyj and Duluth Holdings

Assuming the 90 days horizon Finnair Oyj is expected to under-perform the Duluth Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Finnair Oyj is 1.42 times less risky than Duluth Holdings. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Duluth Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  393.00  in Duluth Holdings on September 3, 2024 and sell it today you would lose (10.00) from holding Duluth Holdings or give up 2.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Finnair Oyj  vs.  Duluth Holdings

Finnair Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Finnair Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Finnair Oyj is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Duluth Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duluth Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Duluth Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Finnair Oyj and Duluth Holdings

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

The idea behind Finnair Oyj and Duluth Holdings 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.