Correlation Between Finnair Oyj and IShares Physical
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and IShares Physical 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 IShares Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and iShares Physical Silver, you can compare the effects of market volatilities on Finnair Oyj and IShares Physical 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 IShares Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and IShares Physical.
Diversification Opportunities for Finnair Oyj and IShares Physical
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Finnair and IShares is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and iShares Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Physical Silver 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 IShares Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Physical Silver has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and IShares Physical go up and down completely randomly.
Pair Corralation between Finnair Oyj and IShares Physical
Assuming the 90 days trading horizon Finnair Oyj is expected to generate 1.51 times more return on investment than IShares Physical. However, Finnair Oyj is 1.51 times more volatile than iShares Physical Silver. It trades about 0.03 of its potential returns per unit of risk. iShares Physical Silver is currently generating about -0.01 per unit of risk. If you would invest 228.00 in Finnair Oyj on October 11, 2024 and sell it today you would earn a total of 5.00 from holding Finnair Oyj or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finnair Oyj vs. iShares Physical Silver
Performance |
| Timeline |
| Finnair Oyj |
| iShares Physical Silver |
Finnair Oyj and IShares Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and IShares Physical
The main advantage of trading using opposite Finnair Oyj and IShares Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, IShares Physical 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 IShares Physical will offset losses from the drop in IShares Physical's long position.| Finnair Oyj vs. Synthomer plc | Finnair Oyj vs. Mobius Investment Trust | Finnair Oyj vs. Home Depot | Finnair Oyj vs. Diversified Energy |
| IShares Physical vs. Symphony Environmental Technologies | IShares Physical vs. SMA Solar Technology | IShares Physical vs. Costco Wholesale Corp | IShares Physical vs. Sartorius Stedim Biotech |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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