Correlation Between UET United and NORWEGIAN AIR
Can any of the company-specific risk be diversified away by investing in both UET United 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 UET United and NORWEGIAN AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UET United Electronic and NORWEGIAN AIR SHUT, you can compare the effects of market volatilities on UET United 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 UET United with a short position of NORWEGIAN AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of UET United and NORWEGIAN AIR.
Diversification Opportunities for UET United and NORWEGIAN AIR
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between UET and NORWEGIAN is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding UET United Electronic 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 UET United 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 UET United Electronic 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 UET United i.e., UET United and NORWEGIAN AIR go up and down completely randomly.
Pair Corralation between UET United and NORWEGIAN AIR
Assuming the 90 days trading horizon UET United Electronic is expected to generate 1.45 times more return on investment than NORWEGIAN AIR. However, UET United is 1.45 times more volatile than NORWEGIAN AIR SHUT. It trades about 0.03 of its potential returns per unit of risk. NORWEGIAN AIR SHUT is currently generating about 0.03 per unit of risk. If you would invest 74.00 in UET United Electronic on September 12, 2024 and sell it today you would earn a total of 22.00 from holding UET United Electronic or generate 29.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UET United Electronic vs. NORWEGIAN AIR SHUT
Performance |
| Timeline |
| UET United Electronic |
| NORWEGIAN AIR SHUT |
UET United and NORWEGIAN AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UET United and NORWEGIAN AIR
The main advantage of trading using opposite UET United and NORWEGIAN AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UET United 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.| UET United vs. Cisco Systems | UET United vs. Nokia | UET United vs. Hewlett Packard Enterprise | UET United vs. Superior Plus Corp |
| NORWEGIAN AIR vs. Meiko Electronics Co | NORWEGIAN AIR vs. UET United Electronic | NORWEGIAN AIR vs. BURLINGTON STORES | NORWEGIAN AIR vs. AEON STORES |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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