Correlation Between Mulberry Group and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both Mulberry Group 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 Mulberry Group and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mulberry Group PLC and Norwegian Air Shuttle, you can compare the effects of market volatilities on Mulberry Group 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 Mulberry Group with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mulberry Group and Norwegian Air.
Diversification Opportunities for Mulberry Group and Norwegian Air
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mulberry and Norwegian is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC 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 Mulberry Group 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 Mulberry Group PLC 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 Mulberry Group i.e., Mulberry Group and Norwegian Air go up and down completely randomly.
Pair Corralation between Mulberry Group and Norwegian Air
Assuming the 90 days trading horizon Mulberry Group PLC is expected to generate 1.32 times more return on investment than Norwegian Air. However, Mulberry Group is 1.32 times more volatile than Norwegian Air Shuttle. It trades about 0.13 of its potential returns per unit of risk. Norwegian Air Shuttle is currently generating about -0.07 per unit of risk. If you would invest 10,000 in Mulberry Group PLC on September 24, 2024 and sell it today you would earn a total of 700.00 from holding Mulberry Group PLC or generate 7.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mulberry Group PLC vs. Norwegian Air Shuttle
Performance |
| Timeline |
| Mulberry Group PLC |
| Norwegian Air Shuttle |
Mulberry Group and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mulberry Group and Norwegian Air
The main advantage of trading using opposite Mulberry Group and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mulberry Group 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.| Mulberry Group vs. Rightmove PLC | Mulberry Group vs. Bioventix | Mulberry Group vs. VeriSign | Mulberry Group vs. Games Workshop Group |
| Norwegian Air vs. Uniper SE | Norwegian Air vs. Mulberry Group PLC | Norwegian Air vs. London Security Plc | Norwegian Air vs. Triad Group PLC |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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