Correlation Between Finnair Oyj and Buhler Industries
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Buhler Industries 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 Finnair Oyj and Buhler Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Buhler Industries, you can compare the effects of market volatilities on Finnair Oyj and Buhler Industries 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 Buhler Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Buhler Industries.
Diversification Opportunities for Finnair Oyj and Buhler Industries
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Finnair and Buhler is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Buhler Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buhler Industries 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 Buhler Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buhler Industries has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Buhler Industries go up and down completely randomly.
Pair Corralation between Finnair Oyj and Buhler Industries
Assuming the 90 days horizon Finnair Oyj is expected to generate 16.54 times more return on investment than Buhler Industries. However, Finnair Oyj is 16.54 times more volatile than Buhler Industries. It trades about 0.03 of its potential returns per unit of risk. Buhler Industries is currently generating about 0.05 per unit of risk. If you would invest 872.00 in Finnair Oyj on September 12, 2024 and sell it today you would lose (647.00) from holding Finnair Oyj or give up 74.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Finnair Oyj vs. Buhler Industries
Performance |
| Timeline |
| Finnair Oyj |
| Buhler Industries |
Finnair Oyj and Buhler Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Buhler Industries
The main advantage of trading using opposite Finnair Oyj and Buhler Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Buhler Industries 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 Buhler Industries will offset losses from the drop in Buhler Industries' long position.| Finnair Oyj vs. easyJet plc | Finnair Oyj vs. Norse Atlantic ASA | Finnair Oyj vs. Air New Zealand | Finnair Oyj vs. Air China Limited |
| Buhler Industries vs. Sphere Entertainment Co | Buhler Industries vs. Tesla Inc | Buhler Industries vs. Pentair PLC | Buhler Industries vs. Porvair plc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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