Correlation Between Norwegian Air and Evolution Gaming
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and Evolution Gaming 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 Norwegian Air and Evolution Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norwegian Air Shuttle and Evolution Gaming Group, you can compare the effects of market volatilities on Norwegian Air and Evolution Gaming 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 Norwegian Air with a short position of Evolution Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and Evolution Gaming.
Diversification Opportunities for Norwegian Air and Evolution Gaming
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Norwegian and Evolution is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and Evolution Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Gaming and Norwegian Air 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 Norwegian Air Shuttle are associated (or correlated) with Evolution Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Gaming has no effect on the direction of Norwegian Air i.e., Norwegian Air and Evolution Gaming go up and down completely randomly.
Pair Corralation between Norwegian Air and Evolution Gaming
Assuming the 90 days trading horizon Norwegian Air Shuttle is expected to generate 1.49 times more return on investment than Evolution Gaming. However, Norwegian Air is 1.49 times more volatile than Evolution Gaming Group. It trades about 0.01 of its potential returns per unit of risk. Evolution Gaming Group is currently generating about -0.04 per unit of risk. If you would invest 1,114 in Norwegian Air Shuttle on October 16, 2024 and sell it today you would lose (114.00) from holding Norwegian Air Shuttle or give up 10.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. Evolution Gaming Group
Performance |
| Timeline |
| Norwegian Air Shuttle |
| Evolution Gaming |
Norwegian Air and Evolution Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and Evolution Gaming
The main advantage of trading using opposite Norwegian Air and Evolution Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, Evolution Gaming 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 Evolution Gaming will offset losses from the drop in Evolution Gaming's long position.| Norwegian Air vs. Zurich Insurance Group | Norwegian Air vs. Light Science Technologies | Norwegian Air vs. Playtech Plc | Norwegian Air vs. Ecclesiastical Insurance Office |
| Evolution Gaming vs. Sabre Insurance Group | Evolution Gaming vs. Norwegian Air Shuttle | Evolution Gaming vs. Sealed Air Corp | Evolution Gaming vs. Lundin Mining Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |