Correlation Between Finnair Oyj and Turning Point
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Turning Point 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 Turning Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Turning Point Brands, you can compare the effects of market volatilities on Finnair Oyj and Turning Point 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 Turning Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Turning Point.
Diversification Opportunities for Finnair Oyj and Turning Point
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Finnair and Turning is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Turning Point Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turning Point Brands 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 Turning Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turning Point Brands has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Turning Point go up and down completely randomly.
Pair Corralation between Finnair Oyj and Turning Point
Assuming the 90 days horizon Finnair Oyj is expected to under-perform the Turning Point. But the pink sheet apears to be less risky and, when comparing its historical volatility, Finnair Oyj is 1.09 times less risky than Turning Point. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Turning Point Brands is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 4,004 in Turning Point Brands on September 2, 2024 and sell it today you would earn a total of 2,186 from holding Turning Point Brands or generate 54.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Finnair Oyj vs. Turning Point Brands
Performance |
| Timeline |
| Finnair Oyj |
| Turning Point Brands |
Finnair Oyj and Turning Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Turning Point
The main advantage of trading using opposite Finnair Oyj and Turning Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Turning Point 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 Turning Point will offset losses from the drop in Turning Point'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 |
| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris 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 Stocks Directory module to find actively traded stocks across global markets.
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