Correlation Between Finnair Oyj and Deltex Medical
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Deltex Medical 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 Deltex Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Deltex Medical Group, you can compare the effects of market volatilities on Finnair Oyj and Deltex Medical 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 Deltex Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Deltex Medical.
Diversification Opportunities for Finnair Oyj and Deltex Medical
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Finnair and Deltex is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Deltex Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deltex Medical Group 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 Deltex Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deltex Medical Group has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Deltex Medical go up and down completely randomly.
Pair Corralation between Finnair Oyj and Deltex Medical
Assuming the 90 days trading horizon Finnair Oyj is expected to under-perform the Deltex Medical. But the stock apears to be less risky and, when comparing its historical volatility, Finnair Oyj is 1.23 times less risky than Deltex Medical. The stock trades about -0.09 of its potential returns per unit of risk. The Deltex Medical Group is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Deltex Medical Group on September 1, 2024 and sell it today you would lose (8.00) from holding Deltex Medical Group or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Finnair Oyj vs. Deltex Medical Group
Performance |
| Timeline |
| Finnair Oyj |
| Deltex Medical Group |
Finnair Oyj and Deltex Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Deltex Medical
The main advantage of trading using opposite Finnair Oyj and Deltex Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Deltex Medical 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 Deltex Medical will offset losses from the drop in Deltex Medical'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 |
| Deltex Medical vs. HCA Healthcare | Deltex Medical vs. Metals Exploration Plc | Deltex Medical vs. Bisichi Mining PLC | Deltex Medical vs. PureTech Health plc |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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