Correlation Between Norwegian Air and GungHo Online
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and GungHo Online 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 GungHo Online 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 GungHo Online Entertainment, you can compare the effects of market volatilities on Norwegian Air and GungHo Online 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 GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and GungHo Online.
Diversification Opportunities for Norwegian Air and GungHo Online
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Norwegian and GungHo is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and GungHo Online Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GungHo Online Entert 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 GungHo Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GungHo Online Entert has no effect on the direction of Norwegian Air i.e., Norwegian Air and GungHo Online go up and down completely randomly.
Pair Corralation between Norwegian Air and GungHo Online
Assuming the 90 days horizon Norwegian Air Shuttle is expected to generate 1.54 times more return on investment than GungHo Online. However, Norwegian Air is 1.54 times more volatile than GungHo Online Entertainment. It trades about 0.01 of its potential returns per unit of risk. GungHo Online Entertainment is currently generating about 0.01 per unit of risk. If you would invest 98.00 in Norwegian Air Shuttle on September 3, 2024 and sell it today you would lose (2.00) from holding Norwegian Air Shuttle or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. GungHo Online Entertainment
Performance |
| Timeline |
| Norwegian Air Shuttle |
| GungHo Online Entert |
Norwegian Air and GungHo Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and GungHo Online
The main advantage of trading using opposite Norwegian Air and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, GungHo Online 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 GungHo Online will offset losses from the drop in GungHo Online's long position.| Norwegian Air vs. SHIP HEALTHCARE HLDGINC | Norwegian Air vs. GALENA MINING LTD | Norwegian Air vs. Tianjin Capital Environmental | Norwegian Air vs. BlueScope Steel Limited |
| GungHo Online vs. JIAHUA STORES | GungHo Online vs. FUYO GENERAL LEASE | GungHo Online vs. THORNEY TECHS LTD | GungHo Online vs. QURATE RETAIL INC |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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