Correlation Between Finnair Oyj and Southern California
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Southern California 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 Southern California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Southern California Gas, you can compare the effects of market volatilities on Finnair Oyj and Southern California 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 Southern California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Southern California.
Diversification Opportunities for Finnair Oyj and Southern California
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Finnair and Southern is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Southern California Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern California Gas 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 Southern California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern California Gas has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Southern California go up and down completely randomly.
Pair Corralation between Finnair Oyj and Southern California
If you would invest 2,550 in Southern California Gas on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Southern California Gas or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Finnair Oyj vs. Southern California Gas
Performance |
| Timeline |
| Finnair Oyj |
| Southern California Gas |
Finnair Oyj and Southern California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Southern California
The main advantage of trading using opposite Finnair Oyj and Southern California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Southern California 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 Southern California will offset losses from the drop in Southern California'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 |
| Southern California vs. Skechers USA | Southern California vs. Weibo Corp | Southern California vs. RBC Bearings Incorporated | Southern California vs. LENSAR Inc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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