Correlation Between AerSale Corp and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both AerSale Corp 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 AerSale Corp and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and Finnair Oyj, you can compare the effects of market volatilities on AerSale Corp 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 AerSale Corp with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and Finnair Oyj.
Diversification Opportunities for AerSale Corp and Finnair Oyj
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between AerSale and Finnair is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and AerSale Corp 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 AerSale 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 AerSale Corp i.e., AerSale Corp and Finnair Oyj go up and down completely randomly.
Pair Corralation between AerSale Corp and Finnair Oyj
Given the investment horizon of 90 days AerSale Corp is expected to under-perform the Finnair Oyj. But the stock apears to be less risky and, when comparing its historical volatility, AerSale Corp is 7.82 times less risky than Finnair Oyj. The stock trades about -0.03 of its potential returns per unit of risk. The Finnair Oyj is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 200.00 in Finnair Oyj on November 9, 2024 and sell it today you would earn a total of 50.00 from holding Finnair Oyj or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.52% |
| Values | Daily Returns |
AerSale Corp vs. Finnair Oyj
Performance |
| Timeline |
| AerSale Corp |
| Finnair Oyj |
AerSale Corp and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and Finnair Oyj
The main advantage of trading using opposite AerSale Corp and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp 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.| AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Corporacion America Airports | AerSale Corp vs. Aeroports de Paris |
| Finnair Oyj vs. Air Canada | Finnair Oyj vs. Dana Inc | Finnair Oyj vs. Fbec Worldwide | Finnair Oyj vs. Hill Street Beverage |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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