Correlation Between KINGBOARD CHEMICAL and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and Norwegian Air Shuttle, you can compare the effects of market volatilities on KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and Norwegian Air.
Diversification Opportunities for KINGBOARD CHEMICAL and Norwegian Air
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KINGBOARD and Norwegian is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and Norwegian Air go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and Norwegian Air
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 0.81 times more return on investment than Norwegian Air. However, KINGBOARD CHEMICAL is 1.23 times less risky than Norwegian Air. It trades about 0.22 of its potential returns per unit of risk. Norwegian Air Shuttle is currently generating about -0.03 per unit of risk. If you would invest 226.00 in KINGBOARD CHEMICAL on November 5, 2024 and sell it today you would earn a total of 20.00 from holding KINGBOARD CHEMICAL or generate 8.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. Norwegian Air Shuttle
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| Norwegian Air Shuttle |
KINGBOARD CHEMICAL and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and Norwegian Air
The main advantage of trading using opposite KINGBOARD CHEMICAL and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL 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.| KINGBOARD CHEMICAL vs. CullenFrost Bankers | KINGBOARD CHEMICAL vs. X FAB Silicon Foundries | KINGBOARD CHEMICAL vs. UNIQA INSURANCE GR | KINGBOARD CHEMICAL vs. SUN LIFE FINANCIAL |
| Norwegian Air vs. Zijin Mining Group | Norwegian Air vs. Calibre Mining Corp | Norwegian Air vs. Geely Automobile Holdings | Norwegian Air vs. ADRIATIC METALS LS 013355 |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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