Correlation Between Finnair Oyj and SmartStop Self
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and SmartStop Self 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 SmartStop Self into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and SmartStop Self Storage, you can compare the effects of market volatilities on Finnair Oyj and SmartStop Self 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 SmartStop Self. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and SmartStop Self.
Diversification Opportunities for Finnair Oyj and SmartStop Self
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finnair and SmartStop is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and SmartStop Self Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartStop Self Storage 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 SmartStop Self. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartStop Self Storage has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and SmartStop Self go up and down completely randomly.
Pair Corralation between Finnair Oyj and SmartStop Self
Assuming the 90 days horizon Finnair Oyj is expected to generate 5.61 times more return on investment than SmartStop Self. However, Finnair Oyj is 5.61 times more volatile than SmartStop Self Storage. It trades about 0.04 of its potential returns per unit of risk. SmartStop Self Storage is currently generating about 0.01 per unit of risk. If you would invest 600.00 in Finnair Oyj on September 4, 2024 and sell it today you would lose (375.00) from holding Finnair Oyj or give up 62.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finnair Oyj vs. SmartStop Self Storage
Performance |
| Timeline |
| Finnair Oyj |
| SmartStop Self Storage |
Finnair Oyj and SmartStop Self Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and SmartStop Self
The main advantage of trading using opposite Finnair Oyj and SmartStop Self positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, SmartStop Self 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 SmartStop Self will offset losses from the drop in SmartStop Self'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 |
| SmartStop Self vs. Palo Alto Networks | SmartStop Self vs. Singular Genomics Systems | SmartStop Self vs. BlackRock | SmartStop Self vs. Deckers Outdoor |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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