Correlation Between Brockhaus Capital and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both Brockhaus Capital 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 Brockhaus Capital and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brockhaus Capital Management and Norwegian Air Shuttle, you can compare the effects of market volatilities on Brockhaus Capital 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 Brockhaus Capital with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brockhaus Capital and Norwegian Air.
Diversification Opportunities for Brockhaus Capital and Norwegian Air
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Brockhaus and Norwegian is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Brockhaus Capital Management 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 Brockhaus Capital 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 Brockhaus Capital Management 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 Brockhaus Capital i.e., Brockhaus Capital and Norwegian Air go up and down completely randomly.
Pair Corralation between Brockhaus Capital and Norwegian Air
Assuming the 90 days trading horizon Brockhaus Capital is expected to generate 1.77 times less return on investment than Norwegian Air. But when comparing it to its historical volatility, Brockhaus Capital Management is 1.18 times less risky than Norwegian Air. It trades about 0.01 of its potential returns per unit of risk. Norwegian Air Shuttle is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 87.00 in Norwegian Air Shuttle on August 24, 2024 and sell it today you would earn a total of 5.00 from holding Norwegian Air Shuttle or generate 5.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Brockhaus Capital Management vs. Norwegian Air Shuttle
Performance |
| Timeline |
| Brockhaus Capital |
| Norwegian Air Shuttle |
Brockhaus Capital and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brockhaus Capital and Norwegian Air
The main advantage of trading using opposite Brockhaus Capital and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brockhaus Capital 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.| Brockhaus Capital vs. The Bank of | Brockhaus Capital vs. Ares Management Corp | Brockhaus Capital vs. Superior Plus Corp | Brockhaus Capital vs. NMI Holdings |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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