Correlation Between 713448FG8 and Finnair Oyj

Can any of the company-specific risk be diversified away by investing in both 713448FG8 and Finnair Oyj 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 713448FG8 and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PEP 275 21 OCT 51 and Finnair Oyj, you can compare the effects of market volatilities on 713448FG8 and Finnair Oyj 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 713448FG8 with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of 713448FG8 and Finnair Oyj.

Diversification Opportunities for 713448FG8 and Finnair Oyj

0.09

Correlation Coefficient

713448FG8  Finnair Oyj

Significant diversification

The 3 months correlation between 713448FG8 and Finnair is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding PEP 275 21 OCT 51 and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and 713448FG8 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 PEP 275 21 OCT 51 are associated (or correlated) with Finnair Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finnair Oyj has no effect on the direction of 713448FG8 i.e., 713448FG8 and Finnair Oyj go up and down completely randomly.

Pair Corralation between 713448FG8 and Finnair Oyj

Assuming the 90 days trading horizon PEP 275 21 OCT 51 is expected to generate 0.88 times more return on investment than Finnair Oyj. However, PEP 275 21 OCT 51 is 1.13 times less risky than Finnair Oyj. It trades about 0.04 of its potential returns per unit of risk. Finnair Oyj is currently generating about 0.01 per unit of risk. If you would invest  6,850  in PEP 275 21 OCT 51 on September 26, 2024 and sell it today you would earn a total of  222.00  from holding PEP 275 21 OCT 51 or generate 3.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	84.38%
Values	Daily Returns

PEP 275 21 OCT 51  vs.  Finnair Oyj

PEP 275 21

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PEP 275 21 OCT 51 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 713448FG8 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with 713448FG8 and Finnair Oyj

The main advantage of trading using opposite 713448FG8 and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 713448FG8 position performs unexpectedly, Finnair Oyj 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 Finnair Oyj will offset losses from the drop in Finnair Oyj's long position.

The idea behind PEP 275 21 OCT 51 and Finnair Oyj 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.