Correlation Between Finnair Oyj and SoftBank Group
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and SoftBank Group 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 SoftBank Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and SoftBank Group Corp, you can compare the effects of market volatilities on Finnair Oyj and SoftBank Group 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 SoftBank Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and SoftBank Group.
Diversification Opportunities for Finnair Oyj and SoftBank Group
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Finnair and SoftBank is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and SoftBank Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoftBank Group 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 SoftBank Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoftBank Group Corp has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and SoftBank Group go up and down completely randomly.
Pair Corralation between Finnair Oyj and SoftBank Group
Assuming the 90 days trading horizon Finnair Oyj is expected to under-perform the SoftBank Group. In addition to that, Finnair Oyj is 1.38 times more volatile than SoftBank Group Corp. It trades about -0.04 of its total potential returns per unit of risk. SoftBank Group Corp is currently generating about 0.05 per unit of volatility. If you would invest 555,735 in SoftBank Group Corp on September 23, 2024 and sell it today you would earn a total of 320,265 from holding SoftBank Group Corp or generate 57.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 82.2% |
| Values | Daily Returns |
Finnair Oyj vs. SoftBank Group Corp
Performance |
| Timeline |
| Finnair Oyj |
| SoftBank Group Corp |
Finnair Oyj and SoftBank Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and SoftBank Group
The main advantage of trading using opposite Finnair Oyj and SoftBank Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, SoftBank Group 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 SoftBank Group will offset losses from the drop in SoftBank Group's long position.| Finnair Oyj vs. Uniper SE | Finnair Oyj vs. Mulberry Group PLC | Finnair Oyj vs. London Security Plc | Finnair Oyj vs. Triad Group PLC |
| SoftBank Group vs. Pentair PLC | SoftBank Group vs. Finnair Oyj | SoftBank Group vs. Fair Oaks Income | SoftBank Group vs. Solstad Offshore ASA |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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