Correlation Between Finnair Oyj and Sun Life
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Sun Life 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 Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Sun Life Financial, you can compare the effects of market volatilities on Finnair Oyj and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Sun Life.
Diversification Opportunities for Finnair Oyj and Sun Life
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Finnair and Sun is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Sun Life go up and down completely randomly.
Pair Corralation between Finnair Oyj and Sun Life
Assuming the 90 days horizon Finnair Oyj is expected to generate 17.86 times more return on investment than Sun Life. However, Finnair Oyj is 17.86 times more volatile than Sun Life Financial. It trades about 0.03 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.07 per unit of risk. If you would invest 749.00 in Finnair Oyj on September 3, 2024 and sell it today you would lose (516.00) from holding Finnair Oyj or give up 68.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Finnair Oyj vs. Sun Life Financial
Performance |
| Timeline |
| Finnair Oyj |
| Sun Life Financial |
Finnair Oyj and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Sun Life
The main advantage of trading using opposite Finnair Oyj and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life'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 |
| Sun Life vs. Axa Equitable Holdings | Sun Life vs. American International Group | Sun Life vs. Arch Capital Group | Sun Life vs. Old Republic International |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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