Correlation Between FC Investment and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both FC Investment 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 FC Investment and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FC Investment Trust and Norwegian Air Shuttle, you can compare the effects of market volatilities on FC Investment 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 FC Investment with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Norwegian Air.
Diversification Opportunities for FC Investment and Norwegian Air
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between FCIT and Norwegian is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust 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 FC Investment 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 FC Investment Trust 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 FC Investment i.e., FC Investment and Norwegian Air go up and down completely randomly.
Pair Corralation between FC Investment and Norwegian Air
Assuming the 90 days trading horizon FC Investment Trust is expected to generate 0.29 times more return on investment than Norwegian Air. However, FC Investment Trust is 3.49 times less risky than Norwegian Air. It trades about 0.14 of its potential returns per unit of risk. Norwegian Air Shuttle is currently generating about -0.08 per unit of risk. If you would invest 105,597 in FC Investment Trust on October 14, 2024 and sell it today you would earn a total of 7,003 from holding FC Investment Trust or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FC Investment Trust vs. Norwegian Air Shuttle
Performance |
| Timeline |
| FC Investment Trust |
| Norwegian Air Shuttle |
FC Investment and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FC Investment and Norwegian Air
The main advantage of trading using opposite FC Investment and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment 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.| FC Investment vs. Naturhouse Health SA | FC Investment vs. Trellus Health plc | FC Investment vs. Bellevue Healthcare Trust | FC Investment vs. Cardinal Health |
| Norwegian Air vs. JD Sports Fashion | Norwegian Air vs. Porvair plc | Norwegian Air vs. Ryanair Holdings plc | Norwegian Air vs. AcadeMedia AB |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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