Correlation Between Finnair Oyj and Mindflair Plc
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Mindflair 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 Mindflair 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 Mindflair Plc, you can compare the effects of market volatilities on Finnair Oyj and Mindflair 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 Mindflair Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Mindflair Plc.
Diversification Opportunities for Finnair Oyj and Mindflair Plc
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finnair and Mindflair is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Mindflair Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mindflair 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 Mindflair Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mindflair Plc has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Mindflair Plc go up and down completely randomly.
Pair Corralation between Finnair Oyj and Mindflair Plc
Assuming the 90 days trading horizon Finnair Oyj is expected to under-perform the Mindflair Plc. In addition to that, Finnair Oyj is 1.22 times more volatile than Mindflair Plc. It trades about -0.4 of its total potential returns per unit of risk. Mindflair Plc is currently generating about 0.01 per unit of volatility. If you would invest 78.00 in Mindflair Plc on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Mindflair Plc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finnair Oyj vs. Mindflair Plc
Performance |
| Timeline |
| Finnair Oyj |
| Mindflair Plc |
Finnair Oyj and Mindflair Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Mindflair Plc
The main advantage of trading using opposite Finnair Oyj and Mindflair Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Mindflair 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 Mindflair Plc will offset losses from the drop in Mindflair 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 |
| Mindflair Plc vs. CATCo Reinsurance Opportunities | Mindflair Plc vs. BH Macro Limited | Mindflair Plc vs. TMT Investments PLC | Mindflair Plc vs. Intermediate Capital Group |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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