Correlation Between Norfolk Southern and Powered Brands
Can any of the company-specific risk be diversified away by investing in both Norfolk Southern and Powered Brands 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 Norfolk Southern and Powered Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norfolk Southern and Powered Brands, you can compare the effects of market volatilities on Norfolk Southern and Powered Brands 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 Norfolk Southern with a short position of Powered Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norfolk Southern and Powered Brands.
Diversification Opportunities for Norfolk Southern and Powered Brands
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Norfolk and Powered is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Norfolk Southern and Powered Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powered Brands and Norfolk Southern 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 Norfolk Southern are associated (or correlated) with Powered Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powered Brands has no effect on the direction of Norfolk Southern i.e., Norfolk Southern and Powered Brands go up and down completely randomly.
Pair Corralation between Norfolk Southern and Powered Brands
If you would invest 23,792 in Norfolk Southern on October 25, 2024 and sell it today you would earn a total of 1,393 from holding Norfolk Southern or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Norfolk Southern vs. Powered Brands
Performance |
| Timeline |
| Norfolk Southern |
| Powered Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Norfolk Southern and Powered Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norfolk Southern and Powered Brands
The main advantage of trading using opposite Norfolk Southern and Powered Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norfolk Southern position performs unexpectedly, Powered Brands 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 Powered Brands will offset losses from the drop in Powered Brands' long position.| Norfolk Southern vs. Union Pacific | Norfolk Southern vs. Canadian Pacific Railway | Norfolk Southern vs. Canadian National Railway | Norfolk Southern vs. Westinghouse Air Brake |
| Powered Brands vs. Nike Inc | Powered Brands vs. Norfolk Southern | Powered Brands vs. Newell Brands | Powered Brands vs. Lindblad Expeditions Holdings |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |