Correlation Between Finnair Oyj and LENSAR
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and LENSAR 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 LENSAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and LENSAR Inc, you can compare the effects of market volatilities on Finnair Oyj and LENSAR 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 LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and LENSAR.
Diversification Opportunities for Finnair Oyj and LENSAR
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Finnair and LENSAR is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc 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 LENSAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LENSAR Inc has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and LENSAR go up and down completely randomly.
Pair Corralation between Finnair Oyj and LENSAR
Assuming the 90 days horizon Finnair Oyj is expected to under-perform the LENSAR. But the pink sheet apears to be less risky and, when comparing its historical volatility, Finnair Oyj is 2.23 times less risky than LENSAR. The pink sheet trades about -0.06 of its potential returns per unit of risk. The LENSAR Inc is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 444.00 in LENSAR Inc on August 28, 2024 and sell it today you would earn a total of 300.00 from holding LENSAR Inc or generate 67.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finnair Oyj vs. LENSAR Inc
Performance |
| Timeline |
| Finnair Oyj |
| LENSAR Inc |
Finnair Oyj and LENSAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and LENSAR
The main advantage of trading using opposite Finnair Oyj and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, LENSAR 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 LENSAR will offset losses from the drop in LENSAR'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 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stocks Directory Find actively traded stocks across global markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |