Correlation Between Norse Atlantic and Wizz Air
Can any of the company-specific risk be diversified away by investing in both Norse Atlantic and Wizz Air 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 Wizz Air 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 Wizz Air Holdings, you can compare the effects of market volatilities on Norse Atlantic and Wizz Air 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 Wizz Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norse Atlantic and Wizz Air.
Diversification Opportunities for Norse Atlantic and Wizz Air
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Norse and Wizz is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Norse Atlantic ASA and Wizz Air Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wizz Air Holdings 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 Wizz Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wizz Air Holdings has no effect on the direction of Norse Atlantic i.e., Norse Atlantic and Wizz Air go up and down completely randomly.
Pair Corralation between Norse Atlantic and Wizz Air
Assuming the 90 days horizon Norse Atlantic ASA is expected to under-perform the Wizz Air. In addition to that, Norse Atlantic is 1.57 times more volatile than Wizz Air Holdings. It trades about -0.06 of its total potential returns per unit of risk. Wizz Air Holdings is currently generating about -0.03 per unit of volatility. If you would invest 3,000 in Wizz Air Holdings on September 12, 2024 and sell it today you would lose (1,397) from holding Wizz Air Holdings or give up 46.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.48% |
| Values | Daily Returns |
Norse Atlantic ASA vs. Wizz Air Holdings
Performance |
| Timeline |
| Norse Atlantic ASA |
| Wizz Air Holdings |
Norse Atlantic and Wizz Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norse Atlantic and Wizz Air
The main advantage of trading using opposite Norse Atlantic and Wizz Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norse Atlantic position performs unexpectedly, Wizz Air 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 Wizz Air will offset losses from the drop in Wizz Air'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 |
| Wizz Air vs. Finnair Oyj | Wizz Air vs. easyJet plc | Wizz Air vs. Norse Atlantic ASA | Wizz Air vs. Air New Zealand |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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