Correlation Between Norwegian Air and URU Metals
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and URU 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 URU 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 URU Metals, you can compare the effects of market volatilities on Norwegian Air and URU 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 URU Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and URU Metals.
Diversification Opportunities for Norwegian Air and URU Metals
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Norwegian and URU is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and URU Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on URU 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 URU Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of URU Metals has no effect on the direction of Norwegian Air i.e., Norwegian Air and URU Metals go up and down completely randomly.
Pair Corralation between Norwegian Air and URU Metals
Assuming the 90 days trading horizon Norwegian Air Shuttle is expected to under-perform the URU Metals. But the stock apears to be less risky and, when comparing its historical volatility, Norwegian Air Shuttle is 3.22 times less risky than URU Metals. The stock trades about -0.02 of its potential returns per unit of risk. The URU Metals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,500 in URU Metals on October 24, 2024 and sell it today you would earn a total of 7,500 from holding URU Metals or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. URU Metals
Performance |
| Timeline |
| Norwegian Air Shuttle |
| URU Metals |
Norwegian Air and URU Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and URU Metals
The main advantage of trading using opposite Norwegian Air and URU Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, URU 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 URU Metals will offset losses from the drop in URU Metals' long position.| Norwegian Air vs. URU Metals | Norwegian Air vs. Adriatic Metals | Norwegian Air vs. Empire Metals Limited | Norwegian Air vs. Gear4music Plc |
| URU Metals vs. Zoom Video Communications | URU Metals vs. Enbridge | URU Metals vs. Endo International PLC | URU Metals vs. Tissue Regenix Group |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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