Correlation Between Tamboran Resources and Finnair Oyj

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

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

Diversification Opportunities for Tamboran Resources and Finnair Oyj

0.36

Correlation Coefficient

Tamboran Resources  Finnair Oyj

Weak diversification

The 3 months correlation between Tamboran and Finnair is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Tamboran Resources and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and Tamboran Resources 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 Tamboran Resources 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 Tamboran Resources i.e., Tamboran Resources and Finnair Oyj go up and down completely randomly.

Pair Corralation between Tamboran Resources and Finnair Oyj

Considering the 90-day investment horizon Tamboran Resources is expected to under-perform the Finnair Oyj. In addition to that, Tamboran Resources is 1.11 times more volatile than Finnair Oyj. It trades about -0.09 of its total potential returns per unit of risk. Finnair Oyj is currently generating about -0.05 per unit of volatility. If you would invest  250.00  in Finnair Oyj on September 4, 2024 and sell it today you would lose (17.00) from holding Finnair Oyj or give up 6.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Tamboran Resources  vs.  Finnair Oyj

Tamboran Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tamboran Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental drivers remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Finnair Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Finnair Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Finnair Oyj is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tamboran Resources and Finnair Oyj

The main advantage of trading using opposite Tamboran Resources and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tamboran Resources 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 Tamboran Resources 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.