Correlation Between Finnair Oyj and Kempower Oyj
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By analyzing existing cross correlation between Finnair Oyj and Kempower Oyj, you can compare the effects of market volatilities on Finnair Oyj and Kempower 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 Finnair Oyj with a short position of Kempower Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Kempower Oyj.
Diversification Opportunities for Finnair Oyj and Kempower Oyj
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Finnair and Kempower is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Kempower Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kempower Oyj and Finnair Oyj 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 Finnair Oyj are associated (or correlated) with Kempower Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kempower Oyj has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Kempower Oyj go up and down completely randomly.
Pair Corralation between Finnair Oyj and Kempower Oyj
Assuming the 90 days trading horizon Finnair Oyj is expected to under-perform the Kempower Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Finnair Oyj is 1.37 times less risky than Kempower Oyj. The stock trades about -0.37 of its potential returns per unit of risk. The Kempower Oyj is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 1,071 in Kempower Oyj on August 29, 2024 and sell it today you would lose (142.00) from holding Kempower Oyj or give up 13.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finnair Oyj vs. Kempower Oyj
Performance |
| Timeline |
| Finnair Oyj |
| Kempower Oyj |
Finnair Oyj and Kempower Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Kempower Oyj
The main advantage of trading using opposite Finnair Oyj and Kempower Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Kempower 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 Kempower Oyj will offset losses from the drop in Kempower Oyj's long position.| Finnair Oyj vs. Aktia Bank Abp | Finnair Oyj vs. Alandsbanken Abp B | Finnair Oyj vs. Alandsbanken Abp A | Finnair Oyj vs. Sampo Oyj A |
| Kempower Oyj vs. Oma Saastopankki Oyj | Kempower Oyj vs. Tecnotree Oyj | Kempower Oyj vs. Tokmanni Group Oyj | Kempower Oyj vs. Vaisala Oyj A |
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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