Correlation Between Nok Airlines and American Axle
Can any of the company-specific risk be diversified away by investing in both Nok Airlines and American Axle 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 Nok Airlines and American Axle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nok Airlines Public and American Axle Manufacturing, you can compare the effects of market volatilities on Nok Airlines and American Axle 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 Nok Airlines with a short position of American Axle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nok Airlines and American Axle.
Diversification Opportunities for Nok Airlines and American Axle
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nok and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nok Airlines Public and American Axle Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Axle Manufa and Nok Airlines 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 Nok Airlines Public are associated (or correlated) with American Axle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Axle Manufa has no effect on the direction of Nok Airlines i.e., Nok Airlines and American Axle go up and down completely randomly.
Pair Corralation between Nok Airlines and American Axle
If you would invest 581.00 in American Axle Manufacturing on August 31, 2024 and sell it today you would earn a total of 89.00 from holding American Axle Manufacturing or generate 15.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nok Airlines Public vs. American Axle Manufacturing
Performance |
| Timeline |
| Nok Airlines Public |
| American Axle Manufa |
Nok Airlines and American Axle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nok Airlines and American Axle
The main advantage of trading using opposite Nok Airlines and American Axle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nok Airlines position performs unexpectedly, American Axle 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 American Axle will offset losses from the drop in American Axle's long position.| Nok Airlines vs. Copa Holdings SA | Nok Airlines vs. United Airlines Holdings | Nok Airlines vs. Delta Air Lines | Nok Airlines vs. SkyWest |
| American Axle vs. Gentex | American Axle vs. Adient PLC | American Axle vs. Autoliv | American Axle vs. Fox Factory Holding |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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