Correlation Between St Galler and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both St Galler 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 St Galler and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between St Galler Kantonalbank and Finnair Oyj, you can compare the effects of market volatilities on St Galler 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 St Galler with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and Finnair Oyj.
Diversification Opportunities for St Galler and Finnair Oyj
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between 0QQZ and Finnair is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and St Galler 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 St Galler Kantonalbank 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 St Galler i.e., St Galler and Finnair Oyj go up and down completely randomly.
Pair Corralation between St Galler and Finnair Oyj
Assuming the 90 days trading horizon St Galler Kantonalbank is expected to generate 0.46 times more return on investment than Finnair Oyj. However, St Galler Kantonalbank is 2.16 times less risky than Finnair Oyj. It trades about 0.23 of its potential returns per unit of risk. Finnair Oyj is currently generating about -0.26 per unit of risk. If you would invest 42,200 in St Galler Kantonalbank on September 5, 2024 and sell it today you would earn a total of 1,450 from holding St Galler Kantonalbank or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
St Galler Kantonalbank vs. Finnair Oyj
Performance |
| Timeline |
| St Galler Kantonalbank |
| Finnair Oyj |
St Galler and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St Galler and Finnair Oyj
The main advantage of trading using opposite St Galler and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Galler 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.| St Galler vs. Southern Copper Corp | St Galler vs. Metals Exploration Plc | St Galler vs. AMG Advanced Metallurgical | St Galler vs. Neometals |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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