Correlation Between Norwegian Air and Brockhaus Capital
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and Brockhaus Capital 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 Brockhaus Capital 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 Brockhaus Capital Management, you can compare the effects of market volatilities on Norwegian Air and Brockhaus Capital 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 Brockhaus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and Brockhaus Capital.
Diversification Opportunities for Norwegian Air and Brockhaus Capital
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Norwegian and Brockhaus is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and Brockhaus Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brockhaus Capital 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 Brockhaus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brockhaus Capital has no effect on the direction of Norwegian Air i.e., Norwegian Air and Brockhaus Capital go up and down completely randomly.
Pair Corralation between Norwegian Air and Brockhaus Capital
Assuming the 90 days horizon Norwegian Air Shuttle is expected to generate 1.18 times more return on investment than Brockhaus Capital. However, Norwegian Air is 1.18 times more volatile than Brockhaus Capital Management. It trades about 0.02 of its potential returns per unit of risk. Brockhaus Capital Management is currently generating about 0.01 per unit of risk. If you would invest 84.00 in Norwegian Air Shuttle on August 28, 2024 and sell it today you would earn a total of 9.00 from holding Norwegian Air Shuttle or generate 10.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. Brockhaus Capital Management
Performance |
| Timeline |
| Norwegian Air Shuttle |
| Brockhaus Capital |
Norwegian Air and Brockhaus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and Brockhaus Capital
The main advantage of trading using opposite Norwegian Air and Brockhaus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, Brockhaus Capital 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 Brockhaus Capital will offset losses from the drop in Brockhaus Capital's long position.| Norwegian Air vs. Jacquet Metal Service | Norwegian Air vs. ALTAIR RES INC | Norwegian Air vs. Alaska Air Group | Norwegian Air vs. ADRIATIC METALS LS 013355 |
| Brockhaus Capital vs. The Bank of | Brockhaus Capital vs. Superior Plus Corp | Brockhaus Capital vs. NMI Holdings | Brockhaus Capital vs. Origin Agritech |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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