Correlation Between Maire Tecnimont and NORWEGIAN AIR
Can any of the company-specific risk be diversified away by investing in both Maire Tecnimont 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 Maire Tecnimont and NORWEGIAN AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maire Tecnimont SpA and NORWEGIAN AIR SHUT, you can compare the effects of market volatilities on Maire Tecnimont 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 Maire Tecnimont with a short position of NORWEGIAN AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maire Tecnimont and NORWEGIAN AIR.
Diversification Opportunities for Maire Tecnimont and NORWEGIAN AIR
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maire and NORWEGIAN is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Maire Tecnimont SpA and NORWEGIAN AIR SHUT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORWEGIAN AIR SHUT and Maire Tecnimont 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 Maire Tecnimont SpA 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 SHUT has no effect on the direction of Maire Tecnimont i.e., Maire Tecnimont and NORWEGIAN AIR go up and down completely randomly.
Pair Corralation between Maire Tecnimont and NORWEGIAN AIR
Assuming the 90 days trading horizon Maire Tecnimont SpA is expected to generate 0.62 times more return on investment than NORWEGIAN AIR. However, Maire Tecnimont SpA is 1.62 times less risky than NORWEGIAN AIR. It trades about 0.27 of its potential returns per unit of risk. NORWEGIAN AIR SHUT is currently generating about 0.07 per unit of risk. If you would invest 707.00 in Maire Tecnimont SpA on September 12, 2024 and sell it today you would earn a total of 68.00 from holding Maire Tecnimont SpA or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Maire Tecnimont SpA vs. NORWEGIAN AIR SHUT
Performance |
| Timeline |
| Maire Tecnimont SpA |
| NORWEGIAN AIR SHUT |
Maire Tecnimont and NORWEGIAN AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maire Tecnimont and NORWEGIAN AIR
The main advantage of trading using opposite Maire Tecnimont and NORWEGIAN AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maire Tecnimont 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.| Maire Tecnimont vs. PLAYMATES TOYS | Maire Tecnimont vs. ePlay Digital | Maire Tecnimont vs. Goodyear Tire Rubber | Maire Tecnimont vs. Heidelberg Materials AG |
| NORWEGIAN AIR vs. Meiko Electronics Co | NORWEGIAN AIR vs. UET United Electronic | NORWEGIAN AIR vs. BURLINGTON STORES | NORWEGIAN AIR vs. AEON STORES |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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