Correlation Between Finnair Oyj and Titan International
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Titan International 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 Titan International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Titan International, you can compare the effects of market volatilities on Finnair Oyj and Titan International 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 Titan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Titan International.
Diversification Opportunities for Finnair Oyj and Titan International
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Finnair and Titan is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Titan International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan International 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 Titan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan International has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Titan International go up and down completely randomly.
Pair Corralation between Finnair Oyj and Titan International
Assuming the 90 days horizon Finnair Oyj is expected to under-perform the Titan International. But the pink sheet apears to be less risky and, when comparing its historical volatility, Finnair Oyj is 1.78 times less risky than Titan International. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Titan International is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 782.00 in Titan International on September 2, 2024 and sell it today you would lose (50.00) from holding Titan International or give up 6.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Finnair Oyj vs. Titan International
Performance |
| Timeline |
| Finnair Oyj |
| Titan International |
Finnair Oyj and Titan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Titan International
The main advantage of trading using opposite Finnair Oyj and Titan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Titan International 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 Titan International will offset losses from the drop in Titan International'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 |
| Titan International vs. Shyft Group | Titan International vs. Manitowoc | Titan International vs. Oshkosh | Titan International vs. Terex |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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