Correlation Between Finnair Oyj and Figs

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

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

Diversification Opportunities for Finnair Oyj and Figs

-0.19

Correlation Coefficient

Finnair Oyj  Figs

Good diversification

The 3 months correlation between Finnair and Figs is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Figs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figs Inc 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 Figs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figs Inc has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Figs go up and down completely randomly.

Pair Corralation between Finnair Oyj and Figs

Assuming the 90 days horizon Finnair Oyj is expected to generate 1.08 times more return on investment than Figs. However, Finnair Oyj is 1.08 times more volatile than Figs Inc. It trades about 0.34 of its potential returns per unit of risk. Figs Inc is currently generating about -0.21 per unit of risk. If you would invest  250.00  in Finnair Oyj on December 1, 2024 and sell it today you would earn a total of  101.00  from holding Finnair Oyj or generate 40.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Finnair Oyj  vs.  Figs Inc

Finnair Oyj

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Finnair Oyj are ranked lower than 15 (%) 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.

Figs Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Figs Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Finnair Oyj and Figs

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

The idea behind Finnair Oyj and Figs Inc 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.