Correlation Between Norwegian Air and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and GreenX Metals 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 GreenX Metals 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 GreenX Metals, you can compare the effects of market volatilities on Norwegian Air and GreenX Metals 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 GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and GreenX Metals.
Diversification Opportunities for Norwegian Air and GreenX Metals
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Norwegian and GreenX is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals 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 GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of Norwegian Air i.e., Norwegian Air and GreenX Metals go up and down completely randomly.
Pair Corralation between Norwegian Air and GreenX Metals
Assuming the 90 days trading horizon Norwegian Air Shuttle is expected to generate 0.85 times more return on investment than GreenX Metals. However, Norwegian Air Shuttle is 1.18 times less risky than GreenX Metals. It trades about 0.03 of its potential returns per unit of risk. GreenX Metals is currently generating about 0.02 per unit of risk. If you would invest 881.00 in Norwegian Air Shuttle on August 28, 2024 and sell it today you would earn a total of 244.00 from holding Norwegian Air Shuttle or generate 27.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. GreenX Metals
Performance |
| Timeline |
| Norwegian Air Shuttle |
| GreenX Metals |
Norwegian Air and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and GreenX Metals
The main advantage of trading using opposite Norwegian Air and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, GreenX Metals 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 GreenX Metals will offset losses from the drop in GreenX Metals' long position.| Norwegian Air vs. Samsung Electronics Co | Norwegian Air vs. Samsung Electronics Co | Norwegian Air vs. Hyundai Motor | Norwegian Air vs. Toyota Motor Corp |
| GreenX Metals vs. Givaudan SA | GreenX Metals vs. Antofagasta PLC | GreenX Metals vs. Atalaya Mining | GreenX Metals vs. Amaroq Minerals |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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