Correlation Between Finnair Oyj and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Lendinvest PLC 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 Lendinvest PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Lendinvest PLC, you can compare the effects of market volatilities on Finnair Oyj and Lendinvest PLC 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 Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Lendinvest PLC.
Diversification Opportunities for Finnair Oyj and Lendinvest PLC
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Finnair and Lendinvest is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest PLC 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 Lendinvest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendinvest PLC has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Lendinvest PLC go up and down completely randomly.
Pair Corralation between Finnair Oyj and Lendinvest PLC
Assuming the 90 days trading horizon Finnair Oyj is expected to under-perform the Lendinvest PLC. In addition to that, Finnair Oyj is 1.36 times more volatile than Lendinvest PLC. It trades about -0.09 of its total potential returns per unit of risk. Lendinvest PLC is currently generating about -0.02 per unit of volatility. If you would invest 2,900 in Lendinvest PLC on September 5, 2024 and sell it today you would lose (260.00) from holding Lendinvest PLC or give up 8.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Finnair Oyj vs. Lendinvest PLC
Performance |
| Timeline |
| Finnair Oyj |
| Lendinvest PLC |
Finnair Oyj and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Lendinvest PLC
The main advantage of trading using opposite Finnair Oyj and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Lendinvest PLC 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 Lendinvest PLC will offset losses from the drop in Lendinvest PLC'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 |
| Lendinvest PLC vs. CleanTech Lithium plc | Lendinvest PLC vs. Caledonia Mining | Lendinvest PLC vs. AfriTin Mining | Lendinvest PLC vs. Anglesey Mining |
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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