Correlation Between Finnair Oyj and ACG Acquisition
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and ACG Acquisition 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 ACG Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and ACG Acquisition Co, you can compare the effects of market volatilities on Finnair Oyj and ACG Acquisition 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 ACG Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and ACG Acquisition.
Diversification Opportunities for Finnair Oyj and ACG Acquisition
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finnair and ACG is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and ACG Acquisition Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACG Acquisition 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 ACG Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACG Acquisition has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and ACG Acquisition go up and down completely randomly.
Pair Corralation between Finnair Oyj and ACG Acquisition
Assuming the 90 days trading horizon Finnair Oyj is expected to generate 7.64 times more return on investment than ACG Acquisition. However, Finnair Oyj is 7.64 times more volatile than ACG Acquisition Co. It trades about 0.27 of its potential returns per unit of risk. ACG Acquisition Co is currently generating about 0.21 per unit of risk. If you would invest 228.00 in Finnair Oyj on November 3, 2024 and sell it today you would earn a total of 23.00 from holding Finnair Oyj or generate 10.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Finnair Oyj vs. ACG Acquisition Co
Performance |
| Timeline |
| Finnair Oyj |
| ACG Acquisition |
Finnair Oyj and ACG Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and ACG Acquisition
The main advantage of trading using opposite Finnair Oyj and ACG Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, ACG Acquisition 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 ACG Acquisition will offset losses from the drop in ACG Acquisition's long position.| Finnair Oyj vs. JD Sports Fashion | Finnair Oyj vs. XLMedia PLC | Finnair Oyj vs. Ameriprise Financial | Finnair Oyj vs. Hollywood Bowl Group |
| ACG Acquisition vs. Leroy Seafood Group | ACG Acquisition vs. JD Sports Fashion | ACG Acquisition vs. Gaztransport et Technigaz | ACG Acquisition vs. Creo Medical 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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