Correlation Between Norwegian Air and EVS Broadcast
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and EVS Broadcast 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 EVS Broadcast 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 EVS Broadcast Equipment, you can compare the effects of market volatilities on Norwegian Air and EVS Broadcast 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 EVS Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and EVS Broadcast.
Diversification Opportunities for Norwegian Air and EVS Broadcast
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Norwegian and EVS is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and EVS Broadcast Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVS Broadcast Equipment 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 EVS Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVS Broadcast Equipment has no effect on the direction of Norwegian Air i.e., Norwegian Air and EVS Broadcast go up and down completely randomly.
Pair Corralation between Norwegian Air and EVS Broadcast
Assuming the 90 days horizon Norwegian Air is expected to generate 5.74 times less return on investment than EVS Broadcast. In addition to that, Norwegian Air is 2.2 times more volatile than EVS Broadcast Equipment. It trades about 0.0 of its total potential returns per unit of risk. EVS Broadcast Equipment is currently generating about 0.04 per unit of volatility. If you would invest 2,913 in EVS Broadcast Equipment on October 25, 2024 and sell it today you would earn a total of 192.00 from holding EVS Broadcast Equipment or generate 6.59% 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. EVS Broadcast Equipment
Performance |
| Timeline |
| Norwegian Air Shuttle |
| EVS Broadcast Equipment |
Norwegian Air and EVS Broadcast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and EVS Broadcast
The main advantage of trading using opposite Norwegian Air and EVS Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, EVS Broadcast 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 EVS Broadcast will offset losses from the drop in EVS Broadcast's long position.| Norwegian Air vs. BROADWIND ENRGY | Norwegian Air vs. SIEM OFFSHORE NEW | Norwegian Air vs. CSSC Offshore Marine | Norwegian Air vs. CEOTRONICS |
| EVS Broadcast vs. Waste Management | EVS Broadcast vs. Sunny Optical Technology | EVS Broadcast vs. ASPEN TECHINC DL | EVS Broadcast vs. Playtech plc |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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