Correlation Between Finnair Oyj and Unum
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Unum 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 Unum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Unum Group, you can compare the effects of market volatilities on Finnair Oyj and Unum 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 Unum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Unum.
Diversification Opportunities for Finnair Oyj and Unum
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finnair and Unum is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group 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 Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Unum go up and down completely randomly.
Pair Corralation between Finnair Oyj and Unum
Assuming the 90 days horizon Finnair Oyj is expected to generate 20.46 times more return on investment than Unum. However, Finnair Oyj is 20.46 times more volatile than Unum Group. It trades about 0.05 of its potential returns per unit of risk. Unum Group is currently generating about 0.17 per unit of risk. If you would invest 200.00 in Finnair Oyj on November 3, 2024 and sell it today you would earn a total of 50.00 from holding Finnair Oyj or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Finnair Oyj vs. Unum Group
Performance |
| Timeline |
| Finnair Oyj |
| Unum Group |
Finnair Oyj and Unum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Unum
The main advantage of trading using opposite Finnair Oyj and Unum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Unum 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 Unum will offset losses from the drop in Unum'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 |
| Unum vs. Prudential Financial | Unum vs. MetLife | Unum vs. Jackson Financial | Unum vs. Manulife Financial Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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