Correlation Between Enter Air and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both Enter Air 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 Enter Air and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enter Air SA and Norwegian Air Shuttle, you can compare the effects of market volatilities on Enter Air 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 Enter Air with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enter Air and Norwegian Air.
Diversification Opportunities for Enter Air and Norwegian Air
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enter and Norwegian is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Enter Air SA 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 Enter 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 Enter Air SA 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 Enter Air i.e., Enter Air and Norwegian Air go up and down completely randomly.
Pair Corralation between Enter Air and Norwegian Air
Assuming the 90 days trading horizon Enter Air SA is expected to generate 1.63 times more return on investment than Norwegian Air. However, Enter Air is 1.63 times more volatile than Norwegian Air Shuttle. It trades about 0.07 of its potential returns per unit of risk. Norwegian Air Shuttle is currently generating about -0.05 per unit of risk. If you would invest 859.00 in Enter Air SA on September 3, 2024 and sell it today you would earn a total of 353.00 from holding Enter Air SA or generate 41.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enter Air SA vs. Norwegian Air Shuttle
Performance |
| Timeline |
| Enter Air SA |
| Norwegian Air Shuttle |
Enter Air and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enter Air and Norwegian Air
The main advantage of trading using opposite Enter Air and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enter Air 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.| Enter Air vs. Uber Technologies | Enter Air vs. Playtech plc | Enter Air vs. Hyatt Hotels | Enter Air vs. HYATT HOTELS A |
| Norwegian Air vs. SHIP HEALTHCARE HLDGINC | Norwegian Air vs. GALENA MINING LTD | Norwegian Air vs. Tianjin Capital Environmental | Norwegian Air vs. BlueScope Steel Limited |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |