Correlation Between Finnair Oyj and Fair Oaks
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Fair Oaks 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 Fair Oaks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Fair Oaks Income, you can compare the effects of market volatilities on Finnair Oyj and Fair Oaks 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 Fair Oaks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Fair Oaks.
Diversification Opportunities for Finnair Oyj and Fair Oaks
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Finnair and Fair is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Fair Oaks Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Oaks Income 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 Fair Oaks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Oaks Income has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Fair Oaks go up and down completely randomly.
Pair Corralation between Finnair Oyj and Fair Oaks
Assuming the 90 days trading horizon Finnair Oyj is expected to under-perform the Fair Oaks. In addition to that, Finnair Oyj is 4.08 times more volatile than Fair Oaks Income. It trades about -0.09 of its total potential returns per unit of risk. Fair Oaks Income is currently generating about 0.14 per unit of volatility. If you would invest 51.00 in Fair Oaks Income on September 3, 2024 and sell it today you would earn a total of 6.00 from holding Fair Oaks Income or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.32% |
| Values | Daily Returns |
Finnair Oyj vs. Fair Oaks Income
Performance |
| Timeline |
| Finnair Oyj |
| Fair Oaks Income |
Finnair Oyj and Fair Oaks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Fair Oaks
The main advantage of trading using opposite Finnair Oyj and Fair Oaks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Fair Oaks 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 Fair Oaks will offset losses from the drop in Fair Oaks' long position.| Finnair Oyj vs. Catalyst Media Group | Finnair Oyj vs. CATLIN GROUP | Finnair Oyj vs. Magnora ASA | Finnair Oyj vs. RTW Venture Fund |
| Fair Oaks vs. Toyota Motor Corp | Fair Oaks vs. SoftBank Group Corp | Fair Oaks vs. OTP Bank Nyrt | Fair Oaks vs. Las Vegas Sands |
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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