Correlation Between Norwegian Air and Alternus Energy
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and Alternus Energy 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 Alternus Energy 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 Alternus Energy Group, you can compare the effects of market volatilities on Norwegian Air and Alternus Energy 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 Alternus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and Alternus Energy.
Diversification Opportunities for Norwegian Air and Alternus Energy
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Norwegian and Alternus is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and Alternus Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternus Energy Group 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 Alternus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternus Energy Group has no effect on the direction of Norwegian Air i.e., Norwegian Air and Alternus Energy go up and down completely randomly.
Pair Corralation between Norwegian Air and Alternus Energy
Assuming the 90 days trading horizon Norwegian Air Shuttle is expected to generate 0.25 times more return on investment than Alternus Energy. However, Norwegian Air Shuttle is 4.05 times less risky than Alternus Energy. It trades about 0.04 of its potential returns per unit of risk. Alternus Energy Group is currently generating about -0.01 per unit of risk. If you would invest 828.00 in Norwegian Air Shuttle on October 11, 2024 and sell it today you would earn a total of 290.00 from holding Norwegian Air Shuttle or generate 35.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. Alternus Energy Group
Performance |
| Timeline |
| Norwegian Air Shuttle |
| Alternus Energy Group |
Norwegian Air and Alternus Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and Alternus Energy
The main advantage of trading using opposite Norwegian Air and Alternus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, Alternus Energy 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 Alternus Energy will offset losses from the drop in Alternus Energy's long position.| Norwegian Air vs. Danske Bank AS | Norwegian Air vs. Kongsberg Automotive Holding | Norwegian Air vs. Nel ASA |
| Alternus Energy vs. Vow Green Metals | Alternus Energy vs. Sunndal Sparebank | Alternus Energy vs. Norwegian Air Shuttle | Alternus Energy vs. BW Offshore |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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