Correlation Between Norse Atlantic and ANA Holdings
Can any of the company-specific risk be diversified away by investing in both Norse Atlantic and ANA Holdings 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 Norse Atlantic and ANA Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norse Atlantic ASA and ANA Holdings ADR, you can compare the effects of market volatilities on Norse Atlantic and ANA Holdings 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 Norse Atlantic with a short position of ANA Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norse Atlantic and ANA Holdings.
Diversification Opportunities for Norse Atlantic and ANA Holdings
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Norse and ANA is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Norse Atlantic ASA and ANA Holdings ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANA Holdings ADR and Norse Atlantic 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 Norse Atlantic ASA are associated (or correlated) with ANA Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANA Holdings ADR has no effect on the direction of Norse Atlantic i.e., Norse Atlantic and ANA Holdings go up and down completely randomly.
Pair Corralation between Norse Atlantic and ANA Holdings
Assuming the 90 days horizon Norse Atlantic ASA is expected to generate 2.05 times more return on investment than ANA Holdings. However, Norse Atlantic is 2.05 times more volatile than ANA Holdings ADR. It trades about 0.11 of its potential returns per unit of risk. ANA Holdings ADR is currently generating about -0.15 per unit of risk. If you would invest 34.00 in Norse Atlantic ASA on October 20, 2024 and sell it today you would earn a total of 2.00 from holding Norse Atlantic ASA or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.21% |
| Values | Daily Returns |
Norse Atlantic ASA vs. ANA Holdings ADR
Performance |
| Timeline |
| Norse Atlantic ASA |
| ANA Holdings ADR |
Norse Atlantic and ANA Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norse Atlantic and ANA Holdings
The main advantage of trading using opposite Norse Atlantic and ANA Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norse Atlantic position performs unexpectedly, ANA Holdings 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 ANA Holdings will offset losses from the drop in ANA Holdings' long position.| Norse Atlantic vs. Finnair Oyj | Norse Atlantic vs. easyJet plc | Norse Atlantic vs. Air New Zealand | Norse Atlantic vs. Air China Limited |
| ANA Holdings vs. Cathay Pacific Airways | ANA Holdings vs. Air China Ltd | ANA Holdings vs. Ajinomoto Co ADR | ANA Holdings vs. Qantas Airways Ltd |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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