Correlation Between NYSE Composite and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Finnair Oyj, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Finnair Oyj.
Diversification Opportunities for NYSE Composite and Finnair Oyj
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Finnair is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Finnair Oyj go up and down completely randomly.
Pair Corralation between NYSE Composite and Finnair Oyj
Assuming the 90 days trading horizon NYSE Composite is expected to generate 8.4 times less return on investment than Finnair Oyj. But when comparing it to its historical volatility, NYSE Composite is 26.86 times less risky than Finnair Oyj. It trades about 0.08 of its potential returns per unit of risk. Finnair Oyj is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 742.00 in Finnair Oyj on August 31, 2024 and sell it today you would lose (509.00) from holding Finnair Oyj or give up 68.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
NYSE Composite vs. Finnair Oyj
Performance |
| Timeline |
NYSE Composite and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Finnair Oyj
Pair trading matchups for Finnair Oyj
Pair Trading with NYSE Composite and Finnair Oyj
The main advantage of trading using opposite NYSE Composite and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Finnair Oyj vs. Copa Holdings SA | Finnair Oyj vs. United Airlines Holdings | Finnair Oyj vs. Delta Air Lines | Finnair Oyj vs. SkyWest |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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