Correlation Between Systemair and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both Systemair and Finnair Oyj 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 Systemair and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and Finnair Oyj, you can compare the effects of market volatilities on Systemair and Finnair Oyj 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 Systemair with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and Finnair Oyj.
Diversification Opportunities for Systemair and Finnair Oyj
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Systemair and Finnair is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and Systemair 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 Systemair AB are associated (or correlated) with Finnair Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finnair Oyj has no effect on the direction of Systemair i.e., Systemair and Finnair Oyj go up and down completely randomly.
Pair Corralation between Systemair and Finnair Oyj
Assuming the 90 days trading horizon Systemair AB is expected to generate 1.09 times more return on investment than Finnair Oyj. However, Systemair is 1.09 times more volatile than Finnair Oyj. It trades about 0.18 of its potential returns per unit of risk. Finnair Oyj is currently generating about -0.4 per unit of risk. If you would invest 8,510 in Systemair AB on August 28, 2024 and sell it today you would earn a total of 700.00 from holding Systemair AB or generate 8.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Systemair AB vs. Finnair Oyj
Performance |
| Timeline |
| Systemair AB |
| Finnair Oyj |
Systemair and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and Finnair Oyj
The main advantage of trading using opposite Systemair and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, Finnair Oyj 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 Finnair Oyj will offset losses from the drop in Finnair Oyj's long position.| Systemair vs. Cornish Metals | Systemair vs. GoldMining | Systemair vs. GreenX Metals | Systemair vs. Leroy Seafood Group |
| Finnair Oyj vs. Samsung Electronics Co | Finnair Oyj vs. Samsung Electronics Co | Finnair Oyj vs. Hyundai Motor | Finnair Oyj vs. Toyota Motor Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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