Correlation Between SSAB AB and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both SSAB AB 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 SSAB AB and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSAB AB ser and Finnair Oyj, you can compare the effects of market volatilities on SSAB AB 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 SSAB AB with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSAB AB and Finnair Oyj.
Diversification Opportunities for SSAB AB and Finnair Oyj
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between SSAB and Finnair is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SSAB AB ser and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and SSAB AB 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 SSAB AB ser 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 SSAB AB i.e., SSAB AB and Finnair Oyj go up and down completely randomly.
Pair Corralation between SSAB AB and Finnair Oyj
Assuming the 90 days trading horizon SSAB AB ser is expected to generate 0.71 times more return on investment than Finnair Oyj. However, SSAB AB ser is 1.4 times less risky than Finnair Oyj. It trades about -0.04 of its potential returns per unit of risk. Finnair Oyj is currently generating about -0.1 per unit of risk. If you would invest 560.00 in SSAB AB ser on September 1, 2024 and sell it today you would lose (124.00) from holding SSAB AB ser or give up 22.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSAB AB ser vs. Finnair Oyj
Performance |
| Timeline |
| SSAB AB ser |
| Finnair Oyj |
SSAB AB and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSAB AB and Finnair Oyj
The main advantage of trading using opposite SSAB AB and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSAB AB 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.| SSAB AB vs. SSAB AB ser | SSAB AB vs. Outokumpu Oyj | SSAB AB vs. Metsa Board Oyj | SSAB AB vs. Telia Company AB |
| Finnair Oyj vs. Fortum Oyj | Finnair Oyj vs. Nordea Bank Abp | Finnair Oyj vs. Sampo Oyj A | Finnair Oyj vs. Neste Oil Oyj |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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