Correlation Between Finnair Oyj and MOL Hungarian
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and MOL Hungarian 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 MOL Hungarian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and MOL Hungarian Oil, you can compare the effects of market volatilities on Finnair Oyj and MOL Hungarian 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 MOL Hungarian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and MOL Hungarian.
Diversification Opportunities for Finnair Oyj and MOL Hungarian
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Finnair and MOL is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and MOL Hungarian Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL Hungarian Oil 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 MOL Hungarian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOL Hungarian Oil has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and MOL Hungarian go up and down completely randomly.
Pair Corralation between Finnair Oyj and MOL Hungarian
Assuming the 90 days trading horizon Finnair Oyj is expected to under-perform the MOL Hungarian. But the stock apears to be less risky and, when comparing its historical volatility, Finnair Oyj is 2.9 times less risky than MOL Hungarian. The stock trades about -0.31 of its potential returns per unit of risk. The MOL Hungarian Oil is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 261,388 in MOL Hungarian Oil on August 30, 2024 and sell it today you would earn a total of 30,812 from holding MOL Hungarian Oil or generate 11.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Finnair Oyj vs. MOL Hungarian Oil
Performance |
| Timeline |
| Finnair Oyj |
| MOL Hungarian Oil |
Finnair Oyj and MOL Hungarian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and MOL Hungarian
The main advantage of trading using opposite Finnair Oyj and MOL Hungarian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, MOL Hungarian 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 MOL Hungarian will offset losses from the drop in MOL Hungarian's long position.| Finnair Oyj vs. Tungsten West PLC | Finnair Oyj vs. Argo Group Limited | Finnair Oyj vs. Hardide PLC | Finnair Oyj vs. Versarien PLC |
| MOL Hungarian vs. Auto Trader Group | MOL Hungarian vs. Sydbank | MOL Hungarian vs. Royal Bank of | MOL Hungarian vs. Charter Communications Cl |
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 CEOs Directory module to screen CEOs from public companies around the world.
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