Correlation Between Norwegian Air and Dave Busters
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and Dave Busters 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 Dave Busters 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 Dave Busters Entertainment, you can compare the effects of market volatilities on Norwegian Air and Dave Busters 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 Dave Busters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and Dave Busters.
Diversification Opportunities for Norwegian Air and Dave Busters
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Norwegian and Dave is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and Dave Busters Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dave Busters Enterta 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 Dave Busters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dave Busters Enterta has no effect on the direction of Norwegian Air i.e., Norwegian Air and Dave Busters go up and down completely randomly.
Pair Corralation between Norwegian Air and Dave Busters
Assuming the 90 days horizon Norwegian Air Shuttle is expected to generate 0.56 times more return on investment than Dave Busters. However, Norwegian Air Shuttle is 1.79 times less risky than Dave Busters. It trades about -0.02 of its potential returns per unit of risk. Dave Busters Entertainment is currently generating about -0.2 per unit of risk. If you would invest 95.00 in Norwegian Air Shuttle on September 22, 2024 and sell it today you would lose (2.00) from holding Norwegian Air Shuttle or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. Dave Busters Entertainment
Performance |
| Timeline |
| Norwegian Air Shuttle |
| Dave Busters Enterta |
Norwegian Air and Dave Busters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and Dave Busters
The main advantage of trading using opposite Norwegian Air and Dave Busters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, Dave Busters 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 Dave Busters will offset losses from the drop in Dave Busters' long position.| Norwegian Air vs. Airports of Thailand | Norwegian Air vs. Airports of Thailand | Norwegian Air vs. Aena SME SA | Norwegian Air vs. AENA SME UNSPADR110 |
| Dave Busters vs. Norwegian Air Shuttle | Dave Busters vs. ALTAIR RES INC | Dave Busters vs. MYFAIR GOLD P | Dave Busters vs. SEALED AIR |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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