Correlation Between Norwegian Cruise and Airbnb
Can any of the company-specific risk be diversified away by investing in both Norwegian Cruise and Airbnb 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 Cruise and Airbnb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norwegian Cruise Line and Airbnb Inc, you can compare the effects of market volatilities on Norwegian Cruise and Airbnb 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 Cruise with a short position of Airbnb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Cruise and Airbnb.
Diversification Opportunities for Norwegian Cruise and Airbnb
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Norwegian and Airbnb is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Cruise Line and Airbnb Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbnb Inc and Norwegian Cruise 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 Cruise Line are associated (or correlated) with Airbnb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbnb Inc has no effect on the direction of Norwegian Cruise i.e., Norwegian Cruise and Airbnb go up and down completely randomly.
Pair Corralation between Norwegian Cruise and Airbnb
Given the investment horizon of 90 days Norwegian Cruise Line is expected to generate 1.31 times more return on investment than Airbnb. However, Norwegian Cruise is 1.31 times more volatile than Airbnb Inc. It trades about 0.24 of its potential returns per unit of risk. Airbnb Inc is currently generating about -0.09 per unit of risk. If you would invest 2,542 in Norwegian Cruise Line on November 4, 2024 and sell it today you would earn a total of 293.00 from holding Norwegian Cruise Line or generate 11.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Cruise Line vs. Airbnb Inc
Performance |
| Timeline |
| Norwegian Cruise Line |
| Airbnb Inc |
Norwegian Cruise and Airbnb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Cruise and Airbnb
The main advantage of trading using opposite Norwegian Cruise and Airbnb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Cruise position performs unexpectedly, Airbnb 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 Airbnb will offset losses from the drop in Airbnb's long position.| Norwegian Cruise vs. Carnival | Norwegian Cruise vs. Airbnb Inc | Norwegian Cruise vs. Expedia Group | Norwegian Cruise vs. Booking Holdings |
| Airbnb vs. Norwegian Cruise Line | Airbnb vs. Royal Caribbean Cruises | Airbnb vs. Expedia Group | Airbnb vs. Booking Holdings |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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