Correlation Between AcadeMedia and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both AcadeMedia 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 AcadeMedia and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AcadeMedia AB and Norwegian Air Shuttle, you can compare the effects of market volatilities on AcadeMedia 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 AcadeMedia with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Norwegian Air.
Diversification Opportunities for AcadeMedia and Norwegian Air
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AcadeMedia and Norwegian is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB 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 AcadeMedia 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 AcadeMedia AB 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 AcadeMedia i.e., AcadeMedia and Norwegian Air go up and down completely randomly.
Pair Corralation between AcadeMedia and Norwegian Air
Assuming the 90 days trading horizon AcadeMedia AB is expected to generate 0.82 times more return on investment than Norwegian Air. However, AcadeMedia AB is 1.22 times less risky than Norwegian Air. It trades about 0.17 of its potential returns per unit of risk. Norwegian Air Shuttle is currently generating about -0.18 per unit of risk. If you would invest 6,550 in AcadeMedia AB on October 14, 2024 and sell it today you would earn a total of 280.00 from holding AcadeMedia AB or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AcadeMedia AB vs. Norwegian Air Shuttle
Performance |
| Timeline |
| AcadeMedia AB |
| Norwegian Air Shuttle |
AcadeMedia and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AcadeMedia and Norwegian Air
The main advantage of trading using opposite AcadeMedia and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia 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.| AcadeMedia vs. Molson Coors Beverage | AcadeMedia vs. Associated British Foods | AcadeMedia vs. Porvair plc | AcadeMedia vs. Delta Air Lines |
| Norwegian Air vs. JD Sports Fashion | Norwegian Air vs. Porvair plc | Norwegian Air vs. Ryanair Holdings plc | Norwegian Air vs. AcadeMedia AB |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |