Correlation Between Instabank ASA and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both Instabank ASA 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 Instabank ASA and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Instabank ASA and Norwegian Air Shuttle, you can compare the effects of market volatilities on Instabank ASA 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 Instabank ASA with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Instabank ASA and Norwegian Air.
Diversification Opportunities for Instabank ASA and Norwegian Air
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Instabank and Norwegian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Instabank ASA 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 Instabank ASA 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 Instabank ASA 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 Instabank ASA i.e., Instabank ASA and Norwegian Air go up and down completely randomly.
Pair Corralation between Instabank ASA and Norwegian Air
Assuming the 90 days trading horizon Instabank ASA is expected to generate 0.67 times more return on investment than Norwegian Air. However, Instabank ASA is 1.49 times less risky than Norwegian Air. It trades about 0.05 of its potential returns per unit of risk. Norwegian Air Shuttle is currently generating about 0.01 per unit of risk. If you would invest 161.00 in Instabank ASA on September 4, 2024 and sell it today you would earn a total of 37.00 from holding Instabank ASA or generate 22.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Instabank ASA vs. Norwegian Air Shuttle
Performance |
| Timeline |
| Instabank ASA |
| Norwegian Air Shuttle |
Instabank ASA and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Instabank ASA and Norwegian Air
The main advantage of trading using opposite Instabank ASA and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Instabank ASA 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.| Instabank ASA vs. DnB ASA | Instabank ASA vs. Sparebank 1 SR | Instabank ASA vs. Sparebank 1 SMN | Instabank ASA vs. Sparebanken Mre |
| Norwegian Air vs. Danske Bank AS | Norwegian Air vs. Kongsberg Automotive Holding | Norwegian Air vs. Nel ASA |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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