Correlation Between Norwegian Air and SOGECLAIR
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and SOGECLAIR 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 Norwegian Air and SOGECLAIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norwegian Air Shuttle and SOGECLAIR SA INH, you can compare the effects of market volatilities on Norwegian Air and SOGECLAIR 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 Norwegian Air with a short position of SOGECLAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and SOGECLAIR.
Diversification Opportunities for Norwegian Air and SOGECLAIR
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Norwegian and SOGECLAIR is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and SOGECLAIR SA INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOGECLAIR SA INH and Norwegian Air 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 Norwegian Air Shuttle are associated (or correlated) with SOGECLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOGECLAIR SA INH has no effect on the direction of Norwegian Air i.e., Norwegian Air and SOGECLAIR go up and down completely randomly.
Pair Corralation between Norwegian Air and SOGECLAIR
Assuming the 90 days horizon Norwegian Air Shuttle is expected to generate 1.11 times more return on investment than SOGECLAIR. However, Norwegian Air is 1.11 times more volatile than SOGECLAIR SA INH. It trades about 0.0 of its potential returns per unit of risk. SOGECLAIR SA INH is currently generating about -0.05 per unit of risk. If you would invest 93.00 in Norwegian Air Shuttle on October 25, 2024 and sell it today you would lose (4.00) from holding Norwegian Air Shuttle or give up 4.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. SOGECLAIR SA INH
Performance |
| Timeline |
| Norwegian Air Shuttle |
| SOGECLAIR SA INH |
Norwegian Air and SOGECLAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and SOGECLAIR
The main advantage of trading using opposite Norwegian Air and SOGECLAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, SOGECLAIR 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 SOGECLAIR will offset losses from the drop in SOGECLAIR's long position.| Norwegian Air vs. BROADWIND ENRGY | Norwegian Air vs. SIEM OFFSHORE NEW | Norwegian Air vs. CSSC Offshore Marine | Norwegian Air vs. CEOTRONICS |
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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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