Correlation Between Norwegian Air and MEBUKI FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and MEBUKI FINANCIAL 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 MEBUKI FINANCIAL 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 MEBUKI FINANCIAL GROUP, you can compare the effects of market volatilities on Norwegian Air and MEBUKI FINANCIAL 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 MEBUKI FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and MEBUKI FINANCIAL.
Diversification Opportunities for Norwegian Air and MEBUKI FINANCIAL
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Norwegian and MEBUKI is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and MEBUKI FINANCIAL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEBUKI FINANCIAL 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 MEBUKI FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEBUKI FINANCIAL has no effect on the direction of Norwegian Air i.e., Norwegian Air and MEBUKI FINANCIAL go up and down completely randomly.
Pair Corralation between Norwegian Air and MEBUKI FINANCIAL
Assuming the 90 days horizon Norwegian Air is expected to generate 2.8 times less return on investment than MEBUKI FINANCIAL. In addition to that, Norwegian Air is 1.56 times more volatile than MEBUKI FINANCIAL GROUP. It trades about 0.02 of its total potential returns per unit of risk. MEBUKI FINANCIAL GROUP is currently generating about 0.09 per unit of volatility. If you would invest 214.00 in MEBUKI FINANCIAL GROUP on August 28, 2024 and sell it today you would earn a total of 188.00 from holding MEBUKI FINANCIAL GROUP or generate 87.85% 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. MEBUKI FINANCIAL GROUP
Performance |
| Timeline |
| Norwegian Air Shuttle |
| MEBUKI FINANCIAL |
Norwegian Air and MEBUKI FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and MEBUKI FINANCIAL
The main advantage of trading using opposite Norwegian Air and MEBUKI FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, MEBUKI FINANCIAL 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 MEBUKI FINANCIAL will offset losses from the drop in MEBUKI FINANCIAL's long position.| Norwegian Air vs. URBAN OUTFITTERS | Norwegian Air vs. Public Storage | Norwegian Air vs. Fidelity National Information | Norwegian Air vs. 24SEVENOFFICE GROUP AB |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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