Correlation Between CATLIN GROUP and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both CATLIN GROUP 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 CATLIN GROUP and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CATLIN GROUP and Finnair Oyj, you can compare the effects of market volatilities on CATLIN GROUP 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 CATLIN GROUP with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of CATLIN GROUP and Finnair Oyj.
Diversification Opportunities for CATLIN GROUP and Finnair Oyj
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CATLIN and Finnair is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding CATLIN GROUP and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and CATLIN GROUP 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 CATLIN GROUP 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 CATLIN GROUP i.e., CATLIN GROUP and Finnair Oyj go up and down completely randomly.
Pair Corralation between CATLIN GROUP and Finnair Oyj
Assuming the 90 days trading horizon CATLIN GROUP is expected to generate 0.48 times more return on investment than Finnair Oyj. However, CATLIN GROUP is 2.1 times less risky than Finnair Oyj. It trades about -0.11 of its potential returns per unit of risk. Finnair Oyj is currently generating about -0.06 per unit of risk. If you would invest 10,100 in CATLIN GROUP on September 3, 2024 and sell it today you would lose (700.00) from holding CATLIN GROUP or give up 6.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CATLIN GROUP vs. Finnair Oyj
Performance |
| Timeline |
| CATLIN GROUP |
| Finnair Oyj |
CATLIN GROUP and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CATLIN GROUP and Finnair Oyj
The main advantage of trading using opposite CATLIN GROUP and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CATLIN GROUP 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.| CATLIN GROUP vs. Molson Coors Beverage | CATLIN GROUP vs. Flowtech Fluidpower plc | CATLIN GROUP vs. CleanTech Lithium plc | CATLIN GROUP vs. Monster Beverage Corp |
| Finnair Oyj vs. Catalyst Media Group | Finnair Oyj vs. CATLIN GROUP | Finnair Oyj vs. Magnora ASA | Finnair Oyj vs. RTW Venture Fund |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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