Correlation Between FEMALE HEALTH and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH 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 FEMALE HEALTH and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and Norwegian Air Shuttle, you can compare the effects of market volatilities on FEMALE HEALTH 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 FEMALE HEALTH with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and Norwegian Air.
Diversification Opportunities for FEMALE HEALTH and Norwegian Air
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between FEMALE and Norwegian is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH i.e., FEMALE HEALTH and Norwegian Air go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and Norwegian Air
Assuming the 90 days trading horizon FEMALE HEALTH is expected to under-perform the Norwegian Air. In addition to that, FEMALE HEALTH is 1.84 times more volatile than Norwegian Air Shuttle. It trades about -0.04 of its total potential returns per unit of risk. Norwegian Air Shuttle is currently generating about 0.03 per unit of volatility. If you would invest 73.00 in Norwegian Air Shuttle on September 3, 2024 and sell it today you would earn a total of 23.00 from holding Norwegian Air Shuttle or generate 31.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FEMALE HEALTH vs. Norwegian Air Shuttle
Performance |
| Timeline |
| FEMALE HEALTH |
| Norwegian Air Shuttle |
FEMALE HEALTH and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and Norwegian Air
The main advantage of trading using opposite FEMALE HEALTH and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH 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.| FEMALE HEALTH vs. Universal Display | FEMALE HEALTH vs. SALESFORCE INC CDR | FEMALE HEALTH vs. Entravision Communications | FEMALE HEALTH vs. ULTRA CLEAN HLDGS |
| Norwegian Air vs. SHIP HEALTHCARE HLDGINC | Norwegian Air vs. GALENA MINING LTD | Norwegian Air vs. Tianjin Capital Environmental | Norwegian Air vs. BlueScope Steel Limited |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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