Correlation Between United Guardian and Finnair Oyj

Can any of the company-specific risk be diversified away by investing in both United Guardian 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 United Guardian and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between United Guardian and Finnair Oyj, you can compare the effects of market volatilities on United Guardian 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 United Guardian with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Guardian and Finnair Oyj.

Diversification Opportunities for United Guardian and Finnair Oyj

0.35

Correlation Coefficient

United Guardian  Finnair Oyj

Weak diversification

The 3 months correlation between United and Finnair is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding United Guardian and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and United Guardian 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 United Guardian 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 United Guardian i.e., United Guardian and Finnair Oyj go up and down completely randomly.

Pair Corralation between United Guardian and Finnair Oyj

Allowing for the 90-day total investment horizon United Guardian is expected to generate 3.07 times less return on investment than Finnair Oyj. In addition to that, United Guardian is 1.01 times more volatile than Finnair Oyj. It trades about 0.04 of its total potential returns per unit of risk. Finnair Oyj is currently generating about 0.11 per unit of volatility. If you would invest  290.00  in Finnair Oyj on May 7, 2025 and sell it today you would earn a total of  50.00  from holding Finnair Oyj or generate 17.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

United Guardian  vs.  Finnair Oyj

United Guardian

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in United Guardian are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, United Guardian is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Finnair Oyj

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Finnair Oyj are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Finnair Oyj reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United Guardian and Finnair Oyj

The main advantage of trading using opposite United Guardian and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Guardian 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.

The idea behind United Guardian and Finnair Oyj pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.