Correlation Between Aker Horizons and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both Aker Horizons 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 Aker Horizons and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aker Horizons AS and Norwegian Air Shuttle, you can compare the effects of market volatilities on Aker Horizons 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 Aker Horizons with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Horizons and Norwegian Air.
Diversification Opportunities for Aker Horizons and Norwegian Air
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aker and Norwegian is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aker Horizons AS 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 Aker Horizons 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 Aker Horizons AS 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 Aker Horizons i.e., Aker Horizons and Norwegian Air go up and down completely randomly.
Pair Corralation between Aker Horizons and Norwegian Air
Assuming the 90 days trading horizon Aker Horizons AS is expected to under-perform the Norwegian Air. In addition to that, Aker Horizons is 1.31 times more volatile than Norwegian Air Shuttle. It trades about -0.08 of its total potential returns per unit of risk. Norwegian Air Shuttle is currently generating about 0.01 per unit of volatility. If you would invest 1,080 in Norwegian Air Shuttle on September 4, 2024 and sell it today you would lose (14.00) from holding Norwegian Air Shuttle or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aker Horizons AS vs. Norwegian Air Shuttle
Performance |
| Timeline |
| Aker Horizons AS |
| Norwegian Air Shuttle |
Aker Horizons and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker Horizons and Norwegian Air
The main advantage of trading using opposite Aker Horizons and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker Horizons 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.| Aker Horizons vs. Aker Carbon Capture | Aker Horizons vs. REC Silicon ASA | Aker Horizons vs. Aker Solutions ASA | Aker Horizons vs. Aker BP 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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