Correlation Between Nok Airlines and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Nok Airlines and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Nok Airlines and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nok Airlines and Dow Jones.
Diversification Opportunities for Nok Airlines and Dow Jones
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nok and Dow is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Nok Airlines Public and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Nok Airlines i.e., Nok Airlines and Dow Jones go up and down completely randomly.
Pair Corralation between Nok Airlines and Dow Jones
Assuming the 90 days horizon Nok Airlines Public is expected to generate 414.7 times more return on investment than Dow Jones. However, Nok Airlines is 414.7 times more volatile than Dow Jones Industrial. It trades about 0.37 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.01 per unit of risk. If you would invest 0.10 in Nok Airlines Public on September 19, 2024 and sell it today you would earn a total of 0.50 from holding Nok Airlines Public or generate 500.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nok Airlines Public vs. Dow Jones Industrial
Performance |
| Timeline |
Nok Airlines and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Nok Airlines Public
Pair trading matchups for Nok Airlines
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Nok Airlines and Dow Jones
The main advantage of trading using opposite Nok Airlines and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nok Airlines position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Nok Airlines vs. Norse Atlantic ASA | Nok Airlines vs. Cebu Air | Nok Airlines vs. Finnair Oyj | Nok Airlines vs. easyJet plc |
| Dow Jones vs. Mangazeya Mining | Dow Jones vs. Summit Materials | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. AMCON Distributing |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| CEOs Directory Screen CEOs from public companies around the world |