Correlation Between Norse Atlantic and EasyJet Plc
Can any of the company-specific risk be diversified away by investing in both Norse Atlantic and EasyJet Plc 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 EasyJet Plc 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 easyJet plc, you can compare the effects of market volatilities on Norse Atlantic and EasyJet Plc 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 EasyJet Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norse Atlantic and EasyJet Plc.
Diversification Opportunities for Norse Atlantic and EasyJet Plc
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Norse and EasyJet is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Norse Atlantic ASA and easyJet plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on easyJet plc 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 EasyJet Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of easyJet plc has no effect on the direction of Norse Atlantic i.e., Norse Atlantic and EasyJet Plc go up and down completely randomly.
Pair Corralation between Norse Atlantic and EasyJet Plc
Assuming the 90 days horizon Norse Atlantic ASA is expected to under-perform the EasyJet Plc. In addition to that, Norse Atlantic is 2.27 times more volatile than easyJet plc. It trades about -0.05 of its total potential returns per unit of risk. easyJet plc is currently generating about 0.04 per unit of volatility. If you would invest 538.00 in easyJet plc on August 24, 2024 and sell it today you would earn a total of 81.00 from holding easyJet plc or generate 15.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 82.86% |
| Values | Daily Returns |
Norse Atlantic ASA vs. easyJet plc
Performance |
| Timeline |
| Norse Atlantic ASA |
| easyJet plc |
Norse Atlantic and EasyJet Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norse Atlantic and EasyJet Plc
The main advantage of trading using opposite Norse Atlantic and EasyJet Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norse Atlantic position performs unexpectedly, EasyJet Plc 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 EasyJet Plc will offset losses from the drop in EasyJet Plc's long position.| Norse Atlantic vs. Finnair Oyj | Norse Atlantic vs. easyJet plc | Norse Atlantic vs. Air New Zealand | Norse Atlantic vs. Air China Limited |
| EasyJet Plc vs. Finnair Oyj | EasyJet Plc vs. Norse Atlantic ASA | EasyJet Plc vs. Air New Zealand | EasyJet Plc 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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