Correlation Between CeoTronics and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both CeoTronics 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 CeoTronics and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CeoTronics AG and Norwegian Air Shuttle, you can compare the effects of market volatilities on CeoTronics 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 CeoTronics with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of CeoTronics and Norwegian Air.
Diversification Opportunities for CeoTronics and Norwegian Air
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CeoTronics and Norwegian is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG 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 CeoTronics 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 CeoTronics AG 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 CeoTronics i.e., CeoTronics and Norwegian Air go up and down completely randomly.
Pair Corralation between CeoTronics and Norwegian Air
Assuming the 90 days trading horizon CeoTronics AG is expected to under-perform the Norwegian Air. But the stock apears to be less risky and, when comparing its historical volatility, CeoTronics AG is 1.57 times less risky than Norwegian Air. The stock trades about -0.15 of its potential returns per unit of risk. The Norwegian Air Shuttle is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 85.00 in Norwegian Air Shuttle on August 28, 2024 and sell it today you would earn a total of 8.00 from holding Norwegian Air Shuttle or generate 9.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CeoTronics AG vs. Norwegian Air Shuttle
Performance |
| Timeline |
| CeoTronics AG |
| Norwegian Air Shuttle |
CeoTronics and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CeoTronics and Norwegian Air
The main advantage of trading using opposite CeoTronics and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CeoTronics 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.| CeoTronics vs. Transportadora de Gas | CeoTronics vs. Air Transport Services | CeoTronics vs. SCIENCE IN SPORT | CeoTronics vs. Gaztransport Technigaz SA |
| Norwegian Air vs. Jacquet Metal Service | Norwegian Air vs. ALTAIR RES INC | Norwegian Air vs. Alaska Air Group | Norwegian Air vs. ADRIATIC METALS LS 013355 |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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