Correlation Between Finnair Oyj and Bertrandt
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Bertrandt 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 Bertrandt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Bertrandt AG, you can compare the effects of market volatilities on Finnair Oyj and Bertrandt 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 Bertrandt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Bertrandt.
Diversification Opportunities for Finnair Oyj and Bertrandt
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Finnair and Bertrandt is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Bertrandt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bertrandt AG 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 Bertrandt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bertrandt AG has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Bertrandt go up and down completely randomly.
Pair Corralation between Finnair Oyj and Bertrandt
Assuming the 90 days trading horizon Finnair Oyj is expected to generate 1.46 times less return on investment than Bertrandt. But when comparing it to its historical volatility, Finnair Oyj is 1.34 times less risky than Bertrandt. It trades about 0.15 of its potential returns per unit of risk. Bertrandt AG is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,700 in Bertrandt AG on September 13, 2024 and sell it today you would earn a total of 175.00 from holding Bertrandt AG or generate 10.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Finnair Oyj vs. Bertrandt AG
Performance |
| Timeline |
| Finnair Oyj |
| Bertrandt AG |
Finnair Oyj and Bertrandt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Bertrandt
The main advantage of trading using opposite Finnair Oyj and Bertrandt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Bertrandt 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 Bertrandt will offset losses from the drop in Bertrandt's long position.| Finnair Oyj vs. Samsung Electronics Co | Finnair Oyj vs. Samsung Electronics Co | Finnair Oyj vs. Hyundai Motor | Finnair Oyj vs. Reliance Industries Ltd |
| Bertrandt vs. Hansa Investment | Bertrandt vs. Central Asia Metals | Bertrandt vs. Future Metals NL | Bertrandt vs. Livermore Investments 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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