Correlation Between Norwegian Air and SIEMENS ENERGY
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and SIEMENS ENERGY 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 SIEMENS ENERGY 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 SIEMENS ENERGY AG, you can compare the effects of market volatilities on Norwegian Air and SIEMENS ENERGY 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 SIEMENS ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and SIEMENS ENERGY.
Diversification Opportunities for Norwegian Air and SIEMENS ENERGY
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Norwegian and SIEMENS is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and SIEMENS ENERGY AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEMENS ENERGY AG 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 SIEMENS ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEMENS ENERGY AG has no effect on the direction of Norwegian Air i.e., Norwegian Air and SIEMENS ENERGY go up and down completely randomly.
Pair Corralation between Norwegian Air and SIEMENS ENERGY
Assuming the 90 days horizon Norwegian Air Shuttle is expected to generate 1.15 times more return on investment than SIEMENS ENERGY. However, Norwegian Air is 1.15 times more volatile than SIEMENS ENERGY AG. It trades about 0.15 of its potential returns per unit of risk. SIEMENS ENERGY AG is currently generating about 0.08 per unit of risk. If you would invest 89.00 in Norwegian Air Shuttle on September 14, 2024 and sell it today you would earn a total of 8.00 from holding Norwegian Air Shuttle or generate 8.99% 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. SIEMENS ENERGY AG
Performance |
| Timeline |
| Norwegian Air Shuttle |
| SIEMENS ENERGY AG |
Norwegian Air and SIEMENS ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and SIEMENS ENERGY
The main advantage of trading using opposite Norwegian Air and SIEMENS ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, SIEMENS ENERGY 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 SIEMENS ENERGY will offset losses from the drop in SIEMENS ENERGY's long position.| Norwegian Air vs. Aena SME SA | Norwegian Air vs. Superior Plus Corp | Norwegian Air vs. SIVERS SEMICONDUCTORS AB | Norwegian Air vs. Norsk Hydro ASA |
| SIEMENS ENERGY vs. Norwegian Air Shuttle | SIEMENS ENERGY vs. NXP Semiconductors NV | SIEMENS ENERGY vs. MYFAIR GOLD P | SIEMENS ENERGY vs. Magnachip Semiconductor |
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.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |