Correlation Between Fastly and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both Fastly and Norwegian Air 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 Fastly and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fastly Inc Cl and Norwegian Air Shuttle, you can compare the effects of market volatilities on Fastly and Norwegian Air 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 Fastly with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fastly and Norwegian Air.
Diversification Opportunities for Fastly and Norwegian Air
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fastly and Norwegian is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fastly Inc Cl and Norwegian Air Shuttle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norwegian Air Shuttle and Fastly 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 Fastly Inc Cl are associated (or correlated) with Norwegian Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norwegian Air Shuttle has no effect on the direction of Fastly i.e., Fastly and Norwegian Air go up and down completely randomly.
Pair Corralation between Fastly and Norwegian Air
Assuming the 90 days trading horizon Fastly Inc Cl is expected to generate 2.98 times more return on investment than Norwegian Air. However, Fastly is 2.98 times more volatile than Norwegian Air Shuttle. It trades about 0.31 of its potential returns per unit of risk. Norwegian Air Shuttle is currently generating about 0.1 per unit of risk. If you would invest 713.00 in Fastly Inc Cl on September 13, 2024 and sell it today you would earn a total of 360.00 from holding Fastly Inc Cl or generate 50.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fastly Inc Cl vs. Norwegian Air Shuttle
Performance |
| Timeline |
| Fastly Inc Cl |
| Norwegian Air Shuttle |
Fastly and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fastly and Norwegian Air
The main advantage of trading using opposite Fastly and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fastly position performs unexpectedly, Norwegian Air 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 Norwegian Air will offset losses from the drop in Norwegian Air's long position.| Fastly vs. Cardinal Health | Fastly vs. Edita Food Industries | Fastly vs. Leroy Seafood Group | Fastly vs. Naked Wines plc |
| Norwegian Air vs. Samsung Electronics Co | Norwegian Air vs. Samsung Electronics Co | Norwegian Air vs. Hyundai Motor | Norwegian Air vs. Reliance Industries Ltd |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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