Correlation Between Jacquet Metal and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal 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 Jacquet Metal and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacquet Metal Service and Norwegian Air Shuttle, you can compare the effects of market volatilities on Jacquet Metal 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 Jacquet Metal with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Norwegian Air.
Diversification Opportunities for Jacquet Metal and Norwegian Air
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jacquet and Norwegian is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service 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 Jacquet Metal 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 Jacquet Metal Service 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 Jacquet Metal i.e., Jacquet Metal and Norwegian Air go up and down completely randomly.
Pair Corralation between Jacquet Metal and Norwegian Air
Assuming the 90 days horizon Jacquet Metal Service is expected to under-perform the Norwegian Air. But the stock apears to be less risky and, when comparing its historical volatility, Jacquet Metal Service is 2.03 times less risky than Norwegian Air. The stock trades about -0.18 of its potential returns per unit of risk. The Norwegian Air Shuttle is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 88.00 in Norwegian Air Shuttle on August 31, 2024 and sell it today you would earn a total of 5.00 from holding Norwegian Air Shuttle or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacquet Metal Service vs. Norwegian Air Shuttle
Performance |
| Timeline |
| Jacquet Metal Service |
| Norwegian Air Shuttle |
Jacquet Metal and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and Norwegian Air
The main advantage of trading using opposite Jacquet Metal and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal 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.| Jacquet Metal vs. Tsingtao Brewery | Jacquet Metal vs. BJs Restaurants | Jacquet Metal vs. GungHo Online Entertainment | Jacquet Metal vs. Thai Beverage Public |
| Norwegian Air vs. United Natural Foods | Norwegian Air vs. Molson Coors Beverage | Norwegian Air vs. JJ SNACK FOODS | Norwegian Air vs. CN MODERN DAIRY |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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