Correlation Between AerCap Holdings and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both AerCap Holdings 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 AerCap Holdings and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerCap Holdings NV and Finnair Oyj, you can compare the effects of market volatilities on AerCap Holdings 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 AerCap Holdings with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerCap Holdings and Finnair Oyj.
Diversification Opportunities for AerCap Holdings and Finnair Oyj
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AerCap and Finnair is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding AerCap Holdings NV and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and AerCap Holdings 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 AerCap Holdings NV 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 AerCap Holdings i.e., AerCap Holdings and Finnair Oyj go up and down completely randomly.
Pair Corralation between AerCap Holdings and Finnair Oyj
Considering the 90-day investment horizon AerCap Holdings NV is expected to generate 0.44 times more return on investment than Finnair Oyj. However, AerCap Holdings NV is 2.27 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 -0.18 per unit of risk. If you would invest 9,330 in AerCap Holdings NV on September 1, 2024 and sell it today you would earn a total of 606.00 from holding AerCap Holdings NV or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
AerCap Holdings NV vs. Finnair Oyj
Performance |
| Timeline |
| AerCap Holdings NV |
| Finnair Oyj |
AerCap Holdings and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerCap Holdings and Finnair Oyj
The main advantage of trading using opposite AerCap Holdings and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerCap Holdings 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.| AerCap Holdings vs. Ryder System | AerCap Holdings vs. Alta Equipment Group | AerCap Holdings vs. PROG Holdings | AerCap Holdings vs. GATX Corporation |
| Finnair Oyj vs. Copa Holdings SA | Finnair Oyj vs. United Airlines Holdings | Finnair Oyj vs. Delta Air Lines | Finnair Oyj vs. SkyWest |
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 CEOs Directory module to screen CEOs from public companies around the world.
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