Correlation Between Finnair Oyj and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Sealed Air 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 Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Sealed Air Corp, you can compare the effects of market volatilities on Finnair Oyj and Sealed Air 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 Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Sealed Air.
Diversification Opportunities for Finnair Oyj and Sealed Air
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finnair and Sealed is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Sealed Air Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air Corp 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 Sealed Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sealed Air Corp has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Sealed Air go up and down completely randomly.
Pair Corralation between Finnair Oyj and Sealed Air
Assuming the 90 days trading horizon Finnair Oyj is expected to under-perform the Sealed Air. In addition to that, Finnair Oyj is 1.32 times more volatile than Sealed Air Corp. It trades about -0.21 of its total potential returns per unit of risk. Sealed Air Corp is currently generating about -0.05 per unit of volatility. If you would invest 3,706 in Sealed Air Corp on September 3, 2024 and sell it today you would lose (46.00) from holding Sealed Air Corp or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Finnair Oyj vs. Sealed Air Corp
Performance |
| Timeline |
| Finnair Oyj |
| Sealed Air Corp |
Finnair Oyj and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Sealed Air
The main advantage of trading using opposite Finnair Oyj and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Sealed Air 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 Sealed Air will offset losses from the drop in Sealed Air's long position.| Finnair Oyj vs. Catalyst Media Group | Finnair Oyj vs. CATLIN GROUP | Finnair Oyj vs. Magnora ASA | Finnair Oyj vs. RTW Venture Fund |
| Sealed Air vs. Cembra Money Bank | Sealed Air vs. Amedeo Air Four | Sealed Air vs. Cairn Homes PLC | Sealed Air vs. Finnair Oyj |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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