Correlation Between Sealed Air and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both Sealed Air 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 Sealed Air and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air Corp and Finnair Oyj, you can compare the effects of market volatilities on Sealed Air 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 Sealed Air with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Finnair Oyj.
Diversification Opportunities for Sealed Air and Finnair Oyj
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sealed and Finnair is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and Sealed Air 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 Sealed Air Corp 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 Sealed Air i.e., Sealed Air and Finnair Oyj go up and down completely randomly.
Pair Corralation between Sealed Air and Finnair Oyj
Assuming the 90 days trading horizon Sealed Air is expected to generate 5.69 times less return on investment than Finnair Oyj. But when comparing it to its historical volatility, Sealed Air Corp is 1.41 times less risky than Finnair Oyj. It trades about 0.04 of its potential returns per unit of risk. Finnair Oyj is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 217.00 in Finnair Oyj on October 20, 2024 and sell it today you would earn a total of 13.00 from holding Finnair Oyj or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Sealed Air Corp vs. Finnair Oyj
Performance |
| Timeline |
| Sealed Air Corp |
| Finnair Oyj |
Sealed Air and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Finnair Oyj
The main advantage of trading using opposite Sealed Air and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air 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.| Sealed Air vs. Alaska Air Group | Sealed Air vs. Made Tech Group | Sealed Air vs. Sartorius Stedim Biotech | Sealed Air vs. Xeros Technology Group |
| Finnair Oyj vs. Qurate Retail Series | Finnair Oyj vs. Jacquet Metal Service | Finnair Oyj vs. Empire Metals Limited | Finnair Oyj vs. Science in Sport |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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