Correlation Between Loews Corp and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both Loews Corp 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 Loews Corp and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loews Corp and Finnair Oyj, you can compare the effects of market volatilities on Loews Corp 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 Loews Corp with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loews Corp and Finnair Oyj.
Diversification Opportunities for Loews Corp and Finnair Oyj
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Loews and Finnair is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Loews Corp and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and Loews Corp 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 Loews Corp 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 Loews Corp i.e., Loews Corp and Finnair Oyj go up and down completely randomly.
Pair Corralation between Loews Corp and Finnair Oyj
Taking into account the 90-day investment horizon Loews Corp is expected to generate 6.32 times less return on investment than Finnair Oyj. But when comparing it to its historical volatility, Loews Corp is 1.91 times less risky than Finnair Oyj. It trades about 0.01 of its potential returns per unit of risk. Finnair Oyj is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 229.00 in Finnair Oyj on October 23, 2024 and sell it today you would earn a total of 6.00 from holding Finnair Oyj or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.68% |
| Values | Daily Returns |
Loews Corp vs. Finnair Oyj
Performance |
| Timeline |
| Loews Corp |
| Finnair Oyj |
Loews Corp and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loews Corp and Finnair Oyj
The main advantage of trading using opposite Loews Corp and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loews Corp 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.| Loews Corp vs. Horace Mann Educators | Loews Corp vs. Global Indemnity PLC | Loews Corp vs. Selective Insurance Group | Loews Corp vs. Kemper |
| Finnair Oyj vs. easyJet plc | Finnair Oyj vs. Norse Atlantic ASA | Finnair Oyj vs. Air New Zealand | Finnair Oyj vs. Air China Limited |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |