Correlation Between Creo Medical and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both Creo 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 Creo 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 Creo Medical Group and Finnair Oyj, you can compare the effects of market volatilities on Creo 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 Creo Medical with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creo Medical and Finnair Oyj.
Diversification Opportunities for Creo Medical and Finnair Oyj
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Creo and Finnair is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Creo Medical Group and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and Creo 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 Creo Medical 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 Creo Medical i.e., Creo Medical and Finnair Oyj go up and down completely randomly.
Pair Corralation between Creo Medical and Finnair Oyj
Assuming the 90 days trading horizon Creo Medical Group is expected to under-perform the Finnair Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Creo Medical Group is 1.49 times less risky than Finnair Oyj. The stock trades about -0.34 of its potential returns per unit of risk. The 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Creo Medical Group vs. Finnair Oyj
Performance |
| Timeline |
| Creo Medical Group |
| Finnair Oyj |
Creo Medical and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creo Medical and Finnair Oyj
The main advantage of trading using opposite Creo Medical and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creo 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.| Creo Medical vs. Cairn Homes PLC | Creo Medical vs. Tetragon Financial Group | Creo Medical vs. Sparebank 1 SR | Creo Medical vs. Sparebanken Vest |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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