Correlation Between Finnair Oyj and Raymond James
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Raymond James 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 Raymond James into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Raymond James Financial, you can compare the effects of market volatilities on Finnair Oyj and Raymond James 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 Raymond James. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Raymond James.
Diversification Opportunities for Finnair Oyj and Raymond James
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Finnair and Raymond is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Raymond James Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raymond James Financial 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 Raymond James. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raymond James Financial has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Raymond James go up and down completely randomly.
Pair Corralation between Finnair Oyj and Raymond James
Assuming the 90 days trading horizon Finnair Oyj is expected to under-perform the Raymond James. In addition to that, Finnair Oyj is 1.14 times more volatile than Raymond James Financial. It trades about -0.05 of its total potential returns per unit of risk. Raymond James Financial is currently generating about -0.03 per unit of volatility. If you would invest 16,105 in Raymond James Financial on October 12, 2024 and sell it today you would lose (218.00) from holding Raymond James Financial or give up 1.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 80.0% |
| Values | Daily Returns |
Finnair Oyj vs. Raymond James Financial
Performance |
| Timeline |
| Finnair Oyj |
| Raymond James Financial |
Finnair Oyj and Raymond James Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Raymond James
The main advantage of trading using opposite Finnair Oyj and Raymond James positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Raymond James 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 Raymond James will offset losses from the drop in Raymond James' long position.| Finnair Oyj vs. Fortune Brands Home | Finnair Oyj vs. Bankers Investment Trust | Finnair Oyj vs. Caledonia Investments | Finnair Oyj vs. United Utilities Group |
| Raymond James vs. Cognizant Technology Solutions | Raymond James vs. Finnair Oyj | Raymond James vs. Software Circle plc | Raymond James vs. Wizz Air Holdings |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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