Correlation Between Finnair Oyj and Old Republic
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Old Republic 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 Old Republic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Old Republic International, you can compare the effects of market volatilities on Finnair Oyj and Old Republic 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 Old Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Old Republic.
Diversification Opportunities for Finnair Oyj and Old Republic
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Finnair and Old is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Old Republic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Republic Interna 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 Old Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Republic Interna has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Old Republic go up and down completely randomly.
Pair Corralation between Finnair Oyj and Old Republic
Assuming the 90 days horizon Finnair Oyj is expected to generate 23.48 times more return on investment than Old Republic. However, Finnair Oyj is 23.48 times more volatile than Old Republic International. It trades about 0.05 of its potential returns per unit of risk. Old Republic International is currently generating about 0.14 per unit of risk. If you would invest 200.00 in Finnair Oyj on November 3, 2024 and sell it today you would earn a total of 50.00 from holding Finnair Oyj or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Finnair Oyj vs. Old Republic International
Performance |
| Timeline |
| Finnair Oyj |
| Old Republic Interna |
Finnair Oyj and Old Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Old Republic
The main advantage of trading using opposite Finnair Oyj and Old Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Old Republic 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 Old Republic will offset losses from the drop in Old Republic'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 |
| Old Republic vs. Axa Equitable Holdings | Old Republic vs. American International Group | Old Republic vs. Arch Capital Group | Old Republic vs. Sun Life Financial |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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