Correlation Between Finnair Oyj and Odyssean Investment
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Odyssean Investment 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 Odyssean Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Odyssean Investment Trust, you can compare the effects of market volatilities on Finnair Oyj and Odyssean Investment 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 Odyssean Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Odyssean Investment.
Diversification Opportunities for Finnair Oyj and Odyssean Investment
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Finnair and Odyssean is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Odyssean Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssean Investment Trust 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 Odyssean Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssean Investment Trust has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Odyssean Investment go up and down completely randomly.
Pair Corralation between Finnair Oyj and Odyssean Investment
Assuming the 90 days trading horizon Finnair Oyj is expected to under-perform the Odyssean Investment. In addition to that, Finnair Oyj is 1.07 times more volatile than Odyssean Investment Trust. It trades about -0.21 of its total potential returns per unit of risk. Odyssean Investment Trust is currently generating about -0.19 per unit of volatility. If you would invest 15,975 in Odyssean Investment Trust on September 3, 2024 and sell it today you would lose (875.00) from holding Odyssean Investment Trust or give up 5.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finnair Oyj vs. Odyssean Investment Trust
Performance |
| Timeline |
| Finnair Oyj |
| Odyssean Investment Trust |
Finnair Oyj and Odyssean Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Odyssean Investment
The main advantage of trading using opposite Finnair Oyj and Odyssean Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Odyssean Investment 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 Odyssean Investment will offset losses from the drop in Odyssean Investment's long position.| Finnair Oyj vs. Catalyst Media Group | Finnair Oyj vs. CATLIN GROUP | Finnair Oyj vs. Magnora ASA | Finnair Oyj vs. RTW Venture Fund |
| Odyssean Investment vs. SupplyMe Capital PLC | Odyssean Investment vs. 88 Energy | Odyssean Investment vs. Vodafone Group PLC | Odyssean Investment vs. Vodafone Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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