Correlation Between QUEEN S and NORWEGIAN AIR
Can any of the company-specific risk be diversified away by investing in both QUEEN S 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 QUEEN S and NORWEGIAN AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QUEEN S ROAD and NORWEGIAN AIR SHUT, you can compare the effects of market volatilities on QUEEN S 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 QUEEN S with a short position of NORWEGIAN AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of QUEEN S and NORWEGIAN AIR.
Diversification Opportunities for QUEEN S and NORWEGIAN AIR
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between QUEEN and NORWEGIAN is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding QUEEN S ROAD 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 QUEEN S 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 QUEEN S ROAD 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 QUEEN S i.e., QUEEN S and NORWEGIAN AIR go up and down completely randomly.
Pair Corralation between QUEEN S and NORWEGIAN AIR
Assuming the 90 days horizon QUEEN S ROAD is expected to generate 0.92 times more return on investment than NORWEGIAN AIR. However, QUEEN S ROAD is 1.09 times less risky than NORWEGIAN AIR. It trades about 0.16 of its potential returns per unit of risk. NORWEGIAN AIR SHUT is currently generating about 0.14 per unit of risk. If you would invest 45.00 in QUEEN S ROAD on September 2, 2024 and sell it today you would earn a total of 4.00 from holding QUEEN S ROAD or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
QUEEN S ROAD vs. NORWEGIAN AIR SHUT
Performance |
| Timeline |
| QUEEN S ROAD |
| NORWEGIAN AIR SHUT |
QUEEN S and NORWEGIAN AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QUEEN S and NORWEGIAN AIR
The main advantage of trading using opposite QUEEN S and NORWEGIAN AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QUEEN S 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.| QUEEN S vs. Ameriprise Financial | QUEEN S vs. Ares Management Corp | QUEEN S vs. Superior Plus Corp | QUEEN S vs. NMI Holdings |
| NORWEGIAN AIR vs. SIVERS SEMICONDUCTORS AB | NORWEGIAN AIR vs. Darden Restaurants | NORWEGIAN AIR vs. Reliance Steel Aluminum | NORWEGIAN AIR vs. Q2M Managementberatung AG |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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