Correlation Between Xeros Technology and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both Xeros Technology 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 Xeros Technology and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xeros Technology Group and Finnair Oyj, you can compare the effects of market volatilities on Xeros Technology 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 Xeros Technology with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xeros Technology and Finnair Oyj.
Diversification Opportunities for Xeros Technology and Finnair Oyj
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xeros and Finnair is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Xeros Technology Group and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and Xeros Technology 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 Xeros Technology Group 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 Xeros Technology i.e., Xeros Technology and Finnair Oyj go up and down completely randomly.
Pair Corralation between Xeros Technology and Finnair Oyj
Assuming the 90 days trading horizon Xeros Technology Group is expected to generate 1.9 times more return on investment than Finnair Oyj. However, Xeros Technology is 1.9 times more volatile than Finnair Oyj. It trades about 0.23 of its potential returns per unit of risk. Finnair Oyj is currently generating about 0.37 per unit of risk. If you would invest 80.00 in Xeros Technology Group on December 11, 2024 and sell it today you would earn a total of 38.00 from holding Xeros Technology Group or generate 47.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xeros Technology Group vs. Finnair Oyj
Performance |
| Timeline |
| Xeros Technology |
| Finnair Oyj |
Xeros Technology and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xeros Technology and Finnair Oyj
The main advantage of trading using opposite Xeros Technology and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xeros Technology 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.| Xeros Technology vs. Ashtead Technology Holdings | Xeros Technology vs. Aberdeen Diversified Income | Xeros Technology vs. Microchip Technology | Xeros Technology vs. Medical Properties Trust |
| Finnair Oyj vs. Impax Environmental Markets | Finnair Oyj vs. Dairy Farm International | Finnair Oyj vs. Batm Advanced Communications | Finnair Oyj vs. Roebuck Food Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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