Correlation Between Finnair Oyj and Horizon Technology
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Horizon Technology 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 Horizon Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Horizon Technology Finance, you can compare the effects of market volatilities on Finnair Oyj and Horizon Technology 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 Horizon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Horizon Technology.
Diversification Opportunities for Finnair Oyj and Horizon Technology
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Finnair and Horizon is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Horizon Technology Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Technology 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 Horizon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Technology has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Horizon Technology go up and down completely randomly.
Pair Corralation between Finnair Oyj and Horizon Technology
Assuming the 90 days horizon Finnair Oyj is expected to under-perform the Horizon Technology. In addition to that, Finnair Oyj is 13.72 times more volatile than Horizon Technology Finance. It trades about -0.18 of its total potential returns per unit of risk. Horizon Technology Finance is currently generating about 0.0 per unit of volatility. If you would invest 2,450 in Horizon Technology Finance on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Horizon Technology Finance or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Finnair Oyj vs. Horizon Technology Finance
Performance |
| Timeline |
| Finnair Oyj |
| Horizon Technology |
Finnair Oyj and Horizon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Horizon Technology
The main advantage of trading using opposite Finnair Oyj and Horizon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Horizon Technology 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 Horizon Technology will offset losses from the drop in Horizon Technology's 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 |
| Horizon Technology vs. Lindblad Expeditions Holdings | Horizon Technology vs. Yuexiu Transport Infrastructure | Horizon Technology vs. Marfrig Global Foods | Horizon Technology vs. Lifevantage |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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