Correlation Between Norwegian Air and Beerenberg
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and Beerenberg 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 Beerenberg 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 Beerenberg AS, you can compare the effects of market volatilities on Norwegian Air and Beerenberg 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 Beerenberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and Beerenberg.
Diversification Opportunities for Norwegian Air and Beerenberg
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Norwegian and Beerenberg is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and Beerenberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beerenberg AS 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 Beerenberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beerenberg AS has no effect on the direction of Norwegian Air i.e., Norwegian Air and Beerenberg go up and down completely randomly.
Pair Corralation between Norwegian Air and Beerenberg
Assuming the 90 days trading horizon Norwegian Air Shuttle is expected to under-perform the Beerenberg. In addition to that, Norwegian Air is 1.48 times more volatile than Beerenberg AS. It trades about -0.03 of its total potential returns per unit of risk. Beerenberg AS is currently generating about 0.15 per unit of volatility. If you would invest 2,750 in Beerenberg AS on August 29, 2024 and sell it today you would earn a total of 1,350 from holding Beerenberg AS or generate 49.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. Beerenberg AS
Performance |
| Timeline |
| Norwegian Air Shuttle |
| Beerenberg AS |
Norwegian Air and Beerenberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and Beerenberg
The main advantage of trading using opposite Norwegian Air and Beerenberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, Beerenberg 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 Beerenberg will offset losses from the drop in Beerenberg's long position.| Norwegian Air vs. Danske Bank AS | Norwegian Air vs. Kongsberg Automotive Holding | Norwegian Air vs. Nel ASA |
| Beerenberg vs. Equinor ASA | Beerenberg vs. DnB ASA | Beerenberg vs. Aker BP ASA | Beerenberg vs. Telenor 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 CEOs Directory module to screen CEOs from public companies around the world.
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