Correlation Between Nok Airlines and Norse Atlantic
Can any of the company-specific risk be diversified away by investing in both Nok Airlines and Norse Atlantic 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 Norse Atlantic 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 Norse Atlantic ASA, you can compare the effects of market volatilities on Nok Airlines and Norse Atlantic 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 Norse Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nok Airlines and Norse Atlantic.
Diversification Opportunities for Nok Airlines and Norse Atlantic
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nok and Norse is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nok Airlines Public and Norse Atlantic ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norse Atlantic ASA 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 Norse Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norse Atlantic ASA has no effect on the direction of Nok Airlines i.e., Nok Airlines and Norse Atlantic go up and down completely randomly.
Pair Corralation between Nok Airlines and Norse Atlantic
Assuming the 90 days horizon Nok Airlines Public is expected to generate 35.48 times more return on investment than Norse Atlantic. However, Nok Airlines is 35.48 times more volatile than Norse Atlantic ASA. It trades about 0.18 of its potential returns per unit of risk. Norse Atlantic ASA is currently generating about 0.11 per unit of risk. If you would invest 0.60 in Nok Airlines Public on October 20, 2024 and sell it today you would lose (0.10) from holding Nok Airlines Public or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
Nok Airlines Public vs. Norse Atlantic ASA
Performance |
| Timeline |
| Nok Airlines Public |
| Norse Atlantic ASA |
Nok Airlines and Norse Atlantic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nok Airlines and Norse Atlantic
The main advantage of trading using opposite Nok Airlines and Norse Atlantic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nok Airlines position performs unexpectedly, Norse Atlantic 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 Norse Atlantic will offset losses from the drop in Norse Atlantic's long position.| Nok Airlines vs. Norse Atlantic ASA | Nok Airlines vs. Cebu Air | Nok Airlines vs. Finnair Oyj | Nok Airlines vs. easyJet plc |
| Norse Atlantic vs. Finnair Oyj | Norse Atlantic vs. easyJet plc | Norse Atlantic vs. Air New Zealand | Norse Atlantic vs. Air China Limited |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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