Correlation Between Advanced Medical and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both Advanced Medical 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 Advanced Medical and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Medical Solutions and Finnair Oyj, you can compare the effects of market volatilities on Advanced Medical 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 Advanced Medical with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and Finnair Oyj.
Diversification Opportunities for Advanced Medical and Finnair Oyj
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Advanced and Finnair is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and Advanced Medical 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 Advanced Medical Solutions 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 Advanced Medical i.e., Advanced Medical and Finnair Oyj go up and down completely randomly.
Pair Corralation between Advanced Medical and Finnair Oyj
Assuming the 90 days trading horizon Advanced Medical is expected to generate 13.54 times less return on investment than Finnair Oyj. But when comparing it to its historical volatility, Advanced Medical Solutions is 2.23 times less risky than Finnair Oyj. It trades about 0.06 of its potential returns per unit of risk. Finnair Oyj is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 242.00 in Finnair Oyj on November 27, 2024 and sell it today you would earn a total of 93.00 from holding Finnair Oyj or generate 38.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Medical Solutions vs. Finnair Oyj
Performance |
| Timeline |
| Advanced Medical Sol |
| Finnair Oyj |
Advanced Medical and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and Finnair Oyj
The main advantage of trading using opposite Advanced Medical and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical 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.| Advanced Medical vs. International Biotechnology Trust | Advanced Medical vs. Ashtead Technology Holdings | Advanced Medical vs. Clean Power Hydrogen | Advanced Medical vs. Ross Stores |
| Finnair Oyj vs. Learning Technologies Group | Finnair Oyj vs. Nordea Bank Abp | Finnair Oyj vs. Tetragon Financial Group | Finnair Oyj vs. Westlake Chemical 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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