Correlation Between USWE SPORTS and NORWEGIAN AIR
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS 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 USWE SPORTS and NORWEGIAN AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USWE SPORTS AB and NORWEGIAN AIR SHUT, you can compare the effects of market volatilities on USWE SPORTS 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 USWE SPORTS with a short position of NORWEGIAN AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and NORWEGIAN AIR.
Diversification Opportunities for USWE SPORTS and NORWEGIAN AIR
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between USWE and NORWEGIAN is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB 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 USWE SPORTS 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 USWE SPORTS 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 SHUT has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and NORWEGIAN AIR go up and down completely randomly.
Pair Corralation between USWE SPORTS and NORWEGIAN AIR
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 0.93 times more return on investment than NORWEGIAN AIR. However, USWE SPORTS AB is 1.08 times less risky than NORWEGIAN AIR. It trades about 0.19 of its potential returns per unit of risk. NORWEGIAN AIR SHUT is currently generating about -0.15 per unit of risk. If you would invest 73.00 in USWE SPORTS AB on October 17, 2024 and sell it today you would earn a total of 6.00 from holding USWE SPORTS AB or generate 8.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. NORWEGIAN AIR SHUT
Performance |
| Timeline |
| USWE SPORTS AB |
| NORWEGIAN AIR SHUT |
USWE SPORTS and NORWEGIAN AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and NORWEGIAN AIR
The main advantage of trading using opposite USWE SPORTS and NORWEGIAN AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS 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.| USWE SPORTS vs. BOS BETTER ONLINE | USWE SPORTS vs. SALESFORCE INC CDR | USWE SPORTS vs. Minerals Technologies | USWE SPORTS vs. CARSALESCOM |
| NORWEGIAN AIR vs. BII Railway Transportation | NORWEGIAN AIR vs. Wizz Air Holdings | NORWEGIAN AIR vs. USWE SPORTS AB | NORWEGIAN AIR vs. Westinghouse Air Brake |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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