Correlation Between MPC Container and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both MPC Container 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 MPC Container and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MPC Container Ships and Norwegian Air Shuttle, you can compare the effects of market volatilities on MPC Container 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 MPC Container with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPC Container and Norwegian Air.
Diversification Opportunities for MPC Container and Norwegian Air
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MPC and Norwegian is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding MPC Container Ships 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 MPC Container 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 MPC Container Ships 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 MPC Container i.e., MPC Container and Norwegian Air go up and down completely randomly.
Pair Corralation between MPC Container and Norwegian Air
Assuming the 90 days trading horizon MPC Container Ships is expected to under-perform the Norwegian Air. In addition to that, MPC Container is 1.46 times more volatile than Norwegian Air Shuttle. It trades about -0.01 of its total potential returns per unit of risk. Norwegian Air Shuttle is currently generating about 0.13 per unit of volatility. If you would invest 1,058 in Norwegian Air Shuttle on September 2, 2024 and sell it today you would earn a total of 67.00 from holding Norwegian Air Shuttle or generate 6.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MPC Container Ships vs. Norwegian Air Shuttle
Performance |
| Timeline |
| MPC Container Ships |
| Norwegian Air Shuttle |
MPC Container and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MPC Container and Norwegian Air
The main advantage of trading using opposite MPC Container and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPC Container 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.| MPC Container vs. 2020 Bulkers | MPC Container vs. Belships | MPC Container vs. BW LPG | MPC Container vs. REC Silicon ASA |
| Norwegian Air vs. REC Silicon ASA | Norwegian Air vs. Aker Horizons AS | Norwegian Air vs. Aker BP ASA | Norwegian Air vs. MPC Container Ships |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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