Correlation Between Axactor SE and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both Axactor SE 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 Axactor SE and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axactor SE and Norwegian Air Shuttle, you can compare the effects of market volatilities on Axactor SE 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 Axactor SE with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axactor SE and Norwegian Air.
Diversification Opportunities for Axactor SE and Norwegian Air
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Axactor and Norwegian is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Axactor SE 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 Axactor SE 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 Axactor SE 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 Axactor SE i.e., Axactor SE and Norwegian Air go up and down completely randomly.
Pair Corralation between Axactor SE and Norwegian Air
Assuming the 90 days trading horizon Axactor SE is expected to generate 0.83 times more return on investment than Norwegian Air. However, Axactor SE is 1.2 times less risky than Norwegian Air. It trades about 0.03 of its potential returns per unit of risk. Norwegian Air Shuttle is currently generating about 0.02 per unit of risk. If you would invest 375.00 in Axactor SE on November 9, 2024 and sell it today you would earn a total of 2.00 from holding Axactor SE or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 50.0% |
| Values | Daily Returns |
Axactor SE vs. Norwegian Air Shuttle
Performance |
| Timeline |
| Axactor SE |
| Norwegian Air Shuttle |
Axactor SE and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axactor SE and Norwegian Air
The main advantage of trading using opposite Axactor SE and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axactor SE 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.| Axactor SE vs. Storebrand ASA | Axactor SE vs. Aker BP ASA | Axactor SE vs. MPC Container Ships | Axactor SE vs. Norske Skog Asa |
| Norwegian Air vs. Danske Bank AS | Norwegian Air vs. Kongsberg Automotive Holding | Norwegian Air vs. Nel ASA |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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