Correlation Between Finnair Oyj and Anglo Eastern
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Anglo Eastern 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 Anglo Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Anglo Eastern Plantations PLC, you can compare the effects of market volatilities on Finnair Oyj and Anglo Eastern 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 Anglo Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Anglo Eastern.
Diversification Opportunities for Finnair Oyj and Anglo Eastern
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finnair and Anglo is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Anglo Eastern Plantations PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo Eastern Planta 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 Anglo Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo Eastern Planta has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Anglo Eastern go up and down completely randomly.
Pair Corralation between Finnair Oyj and Anglo Eastern
Assuming the 90 days trading horizon Finnair Oyj is expected to under-perform the Anglo Eastern. But the stock apears to be less risky and, when comparing its historical volatility, Finnair Oyj is 1.18 times less risky than Anglo Eastern. The stock trades about -0.23 of its potential returns per unit of risk. The Anglo Eastern Plantations PLC is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 67,200 in Anglo Eastern Plantations PLC on September 4, 2024 and sell it today you would lose (400.00) from holding Anglo Eastern Plantations PLC or give up 0.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finnair Oyj vs. Anglo Eastern Plantations PLC
Performance |
| Timeline |
| Finnair Oyj |
| Anglo Eastern Planta |
Finnair Oyj and Anglo Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Anglo Eastern
The main advantage of trading using opposite Finnair Oyj and Anglo Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Anglo Eastern 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 Anglo Eastern will offset losses from the drop in Anglo Eastern's long position.| Finnair Oyj vs. Samsung Electronics Co | Finnair Oyj vs. Samsung Electronics Co | Finnair Oyj vs. Hyundai Motor | Finnair Oyj vs. Toyota Motor Corp |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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