Correlation Between Norwegian Air and QUEEN S
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and QUEEN S 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 QUEEN S 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 QUEEN S ROAD, you can compare the effects of market volatilities on Norwegian Air and QUEEN S 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 QUEEN S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and QUEEN S.
Diversification Opportunities for Norwegian Air and QUEEN S
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Norwegian and QUEEN is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and QUEEN S ROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUEEN S ROAD 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 QUEEN S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUEEN S ROAD has no effect on the direction of Norwegian Air i.e., Norwegian Air and QUEEN S go up and down completely randomly.
Pair Corralation between Norwegian Air and QUEEN S
Assuming the 90 days horizon Norwegian Air Shuttle is expected to under-perform the QUEEN S. But the stock apears to be less risky and, when comparing its historical volatility, Norwegian Air Shuttle is 1.29 times less risky than QUEEN S. The stock trades about -0.01 of its potential returns per unit of risk. The QUEEN S ROAD is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 51.00 in QUEEN S ROAD on August 25, 2024 and sell it today you would earn a total of 1.00 from holding QUEEN S ROAD or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. QUEEN S ROAD
Performance |
| Timeline |
| Norwegian Air Shuttle |
| QUEEN S ROAD |
Norwegian Air and QUEEN S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and QUEEN S
The main advantage of trading using opposite Norwegian Air and QUEEN S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, QUEEN S 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 QUEEN S will offset losses from the drop in QUEEN S's long position.| Norwegian Air vs. AUST AGRICULTURAL | Norwegian Air vs. TITAN MACHINERY | Norwegian Air vs. Federal Agricultural Mortgage | Norwegian Air vs. Hitachi Construction Machinery |
| QUEEN S vs. PLAY2CHILL SA ZY | QUEEN S vs. LG Display Co | QUEEN S vs. Hanison Construction Holdings | QUEEN S vs. COLUMBIA SPORTSWEAR |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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