Correlation Between Herald Investment and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both Herald Investment and Finnair Oyj 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 Herald Investment and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herald Investment Trust and Finnair Oyj, you can compare the effects of market volatilities on Herald Investment and Finnair Oyj 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 Herald Investment with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herald Investment and Finnair Oyj.
Diversification Opportunities for Herald Investment and Finnair Oyj
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Herald and Finnair is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Herald Investment Trust and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and Herald Investment 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 Herald Investment Trust are associated (or correlated) with Finnair Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finnair Oyj has no effect on the direction of Herald Investment i.e., Herald Investment and Finnair Oyj go up and down completely randomly.
Pair Corralation between Herald Investment and Finnair Oyj
Assuming the 90 days trading horizon Herald Investment Trust is expected to under-perform the Finnair Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Herald Investment Trust is 3.02 times less risky than Finnair Oyj. The stock trades about -0.17 of its potential returns per unit of risk. The Finnair Oyj is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 222.00 in Finnair Oyj on November 30, 2024 and sell it today you would earn a total of 130.00 from holding Finnair Oyj or generate 58.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Herald Investment Trust vs. Finnair Oyj
Performance |
| Timeline |
| Herald Investment Trust |
| Finnair Oyj |
Herald Investment and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herald Investment and Finnair Oyj
The main advantage of trading using opposite Herald Investment and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herald Investment position performs unexpectedly, Finnair Oyj 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 Finnair Oyj will offset losses from the drop in Finnair Oyj's long position.| Herald Investment vs. Seraphim Space Investment | Herald Investment vs. Southwest Airlines Co | Herald Investment vs. UNIQA Insurance Group | Herald Investment vs. CAP LEASE AVIATION |
| Finnair Oyj vs. Associated British Foods | Finnair Oyj vs. Global Net Lease | Finnair Oyj vs. National Beverage Corp | Finnair Oyj vs. Nordea Bank Abp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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