Correlation Between Finnair Oyj and Reservoir Media
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Reservoir Media 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 Reservoir Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Reservoir Media, you can compare the effects of market volatilities on Finnair Oyj and Reservoir Media 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 Reservoir Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Reservoir Media.
Diversification Opportunities for Finnair Oyj and Reservoir Media
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Finnair and Reservoir is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Reservoir Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reservoir Media 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 Reservoir Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reservoir Media has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Reservoir Media go up and down completely randomly.
Pair Corralation between Finnair Oyj and Reservoir Media
Assuming the 90 days horizon Finnair Oyj is expected to generate 0.99 times more return on investment than Reservoir Media. However, Finnair Oyj is 1.01 times less risky than Reservoir Media. It trades about 0.13 of its potential returns per unit of risk. Reservoir Media is currently generating about 0.0 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 | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Finnair Oyj vs. Reservoir Media
Performance |
Timeline |
Finnair Oyj |
Reservoir Media |
Finnair Oyj and Reservoir Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Finnair Oyj and Reservoir Media
The main advantage of trading using opposite Finnair Oyj and Reservoir Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Reservoir Media 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 Reservoir Media will offset losses from the drop in Reservoir Media'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 |
Reservoir Media vs. Warner Bros Discovery | Reservoir Media vs. Paramount Global Class | Reservoir Media vs. Live Nation Entertainment | Reservoir Media vs. Nexstar Broadcasting Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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