Correlation Between Norwegian Air and Beijing Media
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and Beijing Media 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 Beijing Media 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 Beijing Media, you can compare the effects of market volatilities on Norwegian Air and Beijing Media 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 Beijing Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and Beijing Media.
Diversification Opportunities for Norwegian Air and Beijing Media
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Norwegian and Beijing is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and Beijing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Media 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 Beijing Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Media has no effect on the direction of Norwegian Air i.e., Norwegian Air and Beijing Media go up and down completely randomly.
Pair Corralation between Norwegian Air and Beijing Media
Assuming the 90 days horizon Norwegian Air Shuttle is expected to generate 0.89 times more return on investment than Beijing Media. However, Norwegian Air Shuttle is 1.12 times less risky than Beijing Media. It trades about 0.24 of its potential returns per unit of risk. Beijing Media is currently generating about 0.04 per unit of risk. If you would invest 84.00 in Norwegian Air Shuttle on August 30, 2024 and sell it today you would earn a total of 13.00 from holding Norwegian Air Shuttle or generate 15.48% 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. Beijing Media
Performance |
| Timeline |
| Norwegian Air Shuttle |
| Beijing Media |
Norwegian Air and Beijing Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and Beijing Media
The main advantage of trading using opposite Norwegian Air and Beijing Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, Beijing Media 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 Beijing Media will offset losses from the drop in Beijing Media's long position.| Norwegian Air vs. Superior Plus Corp | Norwegian Air vs. NMI Holdings | Norwegian Air vs. SIVERS SEMICONDUCTORS AB | Norwegian Air vs. Talanx AG |
| Beijing Media vs. Superior Plus Corp | Beijing Media vs. SIVERS SEMICONDUCTORS AB | Beijing Media vs. Talanx AG | Beijing Media vs. 2G ENERGY |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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