Correlation Between Norwegian Air and Axactor SE
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and Axactor SE 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 Norwegian Air and Axactor SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norwegian Air Shuttle and Axactor SE, you can compare the effects of market volatilities on Norwegian Air and Axactor SE 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 Norwegian Air with a short position of Axactor SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and Axactor SE.
Diversification Opportunities for Norwegian Air and Axactor SE
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Norwegian and Axactor is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and Axactor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axactor SE and Norwegian Air 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 Norwegian Air Shuttle are associated (or correlated) with Axactor SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axactor SE has no effect on the direction of Norwegian Air i.e., Norwegian Air and Axactor SE go up and down completely randomly.
Pair Corralation between Norwegian Air and Axactor SE
Assuming the 90 days trading horizon Norwegian Air Shuttle is expected to generate 0.74 times more return on investment than Axactor SE. However, Norwegian Air Shuttle is 1.36 times less risky than Axactor SE. It trades about 0.01 of its potential returns per unit of risk. Axactor SE is currently generating about -0.13 per unit of risk. If you would invest 1,158 in Norwegian Air Shuttle on November 9, 2024 and sell it today you would lose (37.00) from holding Norwegian Air Shuttle or give up 3.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 22.97% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. Axactor SE
Performance |
| Timeline |
| Norwegian Air Shuttle |
| Axactor SE |
Norwegian Air and Axactor SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and Axactor SE
The main advantage of trading using opposite Norwegian Air and Axactor SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, Axactor SE 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 Axactor SE will offset losses from the drop in Axactor SE's long position.| Norwegian Air vs. Danske Bank AS | Norwegian Air vs. Kongsberg Automotive Holding | Norwegian Air vs. Nel ASA |
| Axactor SE vs. Storebrand ASA | Axactor SE vs. Aker BP ASA | Axactor SE vs. MPC Container Ships | Axactor SE vs. Norske Skog 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Transaction History View history of all your transactions and understand their impact on performance |