Correlation Between Ecclesiastical Insurance and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both Ecclesiastical Insurance 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 Ecclesiastical Insurance and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecclesiastical Insurance Office and Norwegian Air Shuttle, you can compare the effects of market volatilities on Ecclesiastical Insurance 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 Ecclesiastical Insurance with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecclesiastical Insurance and Norwegian Air.
Diversification Opportunities for Ecclesiastical Insurance and Norwegian Air
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ecclesiastical and Norwegian is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ecclesiastical Insurance Offic 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 Ecclesiastical Insurance 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 Ecclesiastical Insurance Office 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 Ecclesiastical Insurance i.e., Ecclesiastical Insurance and Norwegian Air go up and down completely randomly.
Pair Corralation between Ecclesiastical Insurance and Norwegian Air
Assuming the 90 days trading horizon Ecclesiastical Insurance Office is expected to generate 0.39 times more return on investment than Norwegian Air. However, Ecclesiastical Insurance Office is 2.59 times less risky than Norwegian Air. It trades about -0.11 of its potential returns per unit of risk. Norwegian Air Shuttle is currently generating about -0.24 per unit of risk. If you would invest 13,150 in Ecclesiastical Insurance Office on October 16, 2024 and sell it today you would lose (250.00) from holding Ecclesiastical Insurance Office or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecclesiastical Insurance Offic vs. Norwegian Air Shuttle
Performance |
| Timeline |
| Ecclesiastical Insurance |
| Norwegian Air Shuttle |
Ecclesiastical Insurance and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecclesiastical Insurance and Norwegian Air
The main advantage of trading using opposite Ecclesiastical Insurance and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecclesiastical Insurance 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.| Ecclesiastical Insurance vs. FinecoBank SpA | Ecclesiastical Insurance vs. Spotify Technology SA | Ecclesiastical Insurance vs. Moneta Money Bank | Ecclesiastical Insurance vs. Eneraqua Technologies PLC |
| Norwegian Air vs. Pan American Silver | Norwegian Air vs. Spirent Communications plc | Norwegian Air vs. Charter Communications Cl | Norwegian Air vs. Aeorema Communications Plc |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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