Correlation Between Norwegian Air and CryoLife
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and CryoLife 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 CryoLife 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 CryoLife, you can compare the effects of market volatilities on Norwegian Air and CryoLife 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 CryoLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and CryoLife.
Diversification Opportunities for Norwegian Air and CryoLife
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Norwegian and CryoLife is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and CryoLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CryoLife 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 CryoLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CryoLife has no effect on the direction of Norwegian Air i.e., Norwegian Air and CryoLife go up and down completely randomly.
Pair Corralation between Norwegian Air and CryoLife
Assuming the 90 days horizon Norwegian Air is expected to generate 4.72 times less return on investment than CryoLife. In addition to that, Norwegian Air is 1.31 times more volatile than CryoLife. It trades about 0.01 of its total potential returns per unit of risk. CryoLife is currently generating about 0.08 per unit of volatility. If you would invest 1,240 in CryoLife on November 5, 2024 and sell it today you would earn a total of 1,745 from holding CryoLife or generate 140.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. CryoLife
Performance |
| Timeline |
| Norwegian Air Shuttle |
| CryoLife |
Norwegian Air and CryoLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and CryoLife
The main advantage of trading using opposite Norwegian Air and CryoLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, CryoLife 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 CryoLife will offset losses from the drop in CryoLife's long position.| Norwegian Air vs. Zijin Mining Group | Norwegian Air vs. Calibre Mining Corp | Norwegian Air vs. Geely Automobile Holdings | Norwegian Air vs. ADRIATIC METALS LS 013355 |
| CryoLife vs. Zoom Video Communications | CryoLife vs. SOCKET MOBILE NEW | CryoLife vs. Entravision Communications | CryoLife vs. Verizon Communications |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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