Correlation Between ARDAGH METAL and NORWEGIAN AIR
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL 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 ARDAGH METAL and NORWEGIAN AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and NORWEGIAN AIR SHUT, you can compare the effects of market volatilities on ARDAGH METAL 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 ARDAGH METAL with a short position of NORWEGIAN AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and NORWEGIAN AIR.
Diversification Opportunities for ARDAGH METAL and NORWEGIAN AIR
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ARDAGH and NORWEGIAN is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 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 ARDAGH METAL 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 ARDAGH METAL PACDL 0001 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 ARDAGH METAL i.e., ARDAGH METAL and NORWEGIAN AIR go up and down completely randomly.
Pair Corralation between ARDAGH METAL and NORWEGIAN AIR
Assuming the 90 days horizon ARDAGH METAL is expected to generate 5.04 times less return on investment than NORWEGIAN AIR. In addition to that, ARDAGH METAL is 1.21 times more volatile than NORWEGIAN AIR SHUT. It trades about 0.03 of its total potential returns per unit of risk. NORWEGIAN AIR SHUT is currently generating about 0.19 per unit of volatility. If you would invest 87.00 in NORWEGIAN AIR SHUT on August 31, 2024 and sell it today you would earn a total of 10.00 from holding NORWEGIAN AIR SHUT or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. NORWEGIAN AIR SHUT
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| NORWEGIAN AIR SHUT |
ARDAGH METAL and NORWEGIAN AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and NORWEGIAN AIR
The main advantage of trading using opposite ARDAGH METAL and NORWEGIAN AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL 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.| ARDAGH METAL vs. KAUFMAN ET BROAD | ARDAGH METAL vs. GRIFFIN MINING LTD | ARDAGH METAL vs. Nishi Nippon Railroad Co | ARDAGH METAL vs. EVS Broadcast Equipment |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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