Correlation Between TKO Group and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both TKO Group 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 TKO Group and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TKO Group Holdings, and Finnair Oyj, you can compare the effects of market volatilities on TKO Group 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 TKO Group with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKO Group and Finnair Oyj.
Diversification Opportunities for TKO Group and Finnair Oyj
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TKO and Finnair is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding TKO Group Holdings, and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and TKO Group 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 TKO Group Holdings, 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 TKO Group i.e., TKO Group and Finnair Oyj go up and down completely randomly.
Pair Corralation between TKO Group and Finnair Oyj
Considering the 90-day investment horizon TKO Group is expected to generate 2.92 times less return on investment than Finnair Oyj. But when comparing it to its historical volatility, TKO Group Holdings, is 8.56 times less risky than Finnair Oyj. It trades about 0.07 of its potential returns per unit of risk. Finnair Oyj is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 729.00 in Finnair Oyj on September 5, 2024 and sell it today you would lose (504.00) from holding Finnair Oyj or give up 69.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
TKO Group Holdings, vs. Finnair Oyj
Performance |
| Timeline |
| TKO Group Holdings, |
| Finnair Oyj |
TKO Group and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TKO Group and Finnair Oyj
The main advantage of trading using opposite TKO Group and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKO Group 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.| TKO Group vs. Finnair Oyj | TKO Group vs. Air Lease | TKO Group vs. AerSale Corp | TKO Group vs. Mesa Air Group |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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