Correlation Between Foresight Environmental and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both Foresight Environmental 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 Foresight Environmental and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foresight Environmental Infrastructure and Norwegian Air Shuttle, you can compare the effects of market volatilities on Foresight Environmental 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 Foresight Environmental with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foresight Environmental and Norwegian Air.
Diversification Opportunities for Foresight Environmental and Norwegian Air
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Foresight and Norwegian is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Foresight Environmental Infras 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 Foresight Environmental 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 Foresight Environmental Infrastructure 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 Foresight Environmental i.e., Foresight Environmental and Norwegian Air go up and down completely randomly.
Pair Corralation between Foresight Environmental and Norwegian Air
Assuming the 90 days trading horizon Foresight Environmental Infrastructure is expected to under-perform the Norwegian Air. But the stock apears to be less risky and, when comparing its historical volatility, Foresight Environmental Infrastructure is 1.29 times less risky than Norwegian Air. The stock trades about -0.28 of its potential returns per unit of risk. The Norwegian Air Shuttle is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,106 in Norwegian Air Shuttle on November 7, 2024 and sell it today you would lose (19.00) from holding Norwegian Air Shuttle or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foresight Environmental Infras vs. Norwegian Air Shuttle
Performance |
| Timeline |
| Foresight Environmental |
| Norwegian Air Shuttle |
Foresight Environmental and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foresight Environmental and Norwegian Air
The main advantage of trading using opposite Foresight Environmental and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foresight Environmental 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.| Foresight Environmental vs. Fair Oaks Income | Foresight Environmental vs. Legal General Group | Foresight Environmental vs. Intermediate Capital Group | Foresight Environmental vs. FC Investment Trust |
| Norwegian Air vs. Hollywood Bowl Group | Norwegian Air vs. Catalyst Media Group | Norwegian Air vs. Ubisoft Entertainment | Norwegian Air vs. Waste Management |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |