Correlation Between MeVis Medical and NORWEGIAN AIR
Can any of the company-specific risk be diversified away by investing in both MeVis Medical 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 MeVis Medical and NORWEGIAN AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MeVis Medical Solutions and NORWEGIAN AIR SHUT, you can compare the effects of market volatilities on MeVis Medical 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 MeVis Medical with a short position of NORWEGIAN AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and NORWEGIAN AIR.
Diversification Opportunities for MeVis Medical and NORWEGIAN AIR
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MeVis and NORWEGIAN is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions and NORWEGIAN AIR SHUT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORWEGIAN AIR SHUT and MeVis Medical 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 MeVis Medical Solutions 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 SHUT has no effect on the direction of MeVis Medical i.e., MeVis Medical and NORWEGIAN AIR go up and down completely randomly.
Pair Corralation between MeVis Medical and NORWEGIAN AIR
Assuming the 90 days trading horizon MeVis Medical Solutions is expected to generate 0.24 times more return on investment than NORWEGIAN AIR. However, MeVis Medical Solutions is 4.19 times less risky than NORWEGIAN AIR. It trades about 0.14 of its potential returns per unit of risk. NORWEGIAN AIR SHUT is currently generating about -0.07 per unit of risk. If you would invest 2,440 in MeVis Medical Solutions on October 26, 2024 and sell it today you would earn a total of 40.00 from holding MeVis Medical Solutions or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MeVis Medical Solutions vs. NORWEGIAN AIR SHUT
Performance |
| Timeline |
| MeVis Medical Solutions |
| NORWEGIAN AIR SHUT |
MeVis Medical and NORWEGIAN AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MeVis Medical and NORWEGIAN AIR
The main advantage of trading using opposite MeVis Medical and NORWEGIAN AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeVis Medical 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.| MeVis Medical vs. Wayside Technology Group | MeVis Medical vs. FANDIFI TECHNOLOGY P | MeVis Medical vs. Check Point Software | MeVis Medical vs. IMPERIAL TOBACCO |
| NORWEGIAN AIR vs. MeVis Medical Solutions | NORWEGIAN AIR vs. IMAGIN MEDICAL INC | NORWEGIAN AIR vs. Sims Metal Management | NORWEGIAN AIR vs. Cleanaway 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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