Correlation Between Norwegian Air and KINGBOARD CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL, you can compare the effects of market volatilities on Norwegian Air and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and KINGBOARD CHEMICAL.
Diversification Opportunities for Norwegian Air and KINGBOARD CHEMICAL
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Norwegian and KINGBOARD is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and KINGBOARD CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINGBOARD CHEMICAL has no effect on the direction of Norwegian Air i.e., Norwegian Air and KINGBOARD CHEMICAL go up and down completely randomly.
Pair Corralation between Norwegian Air and KINGBOARD CHEMICAL
Assuming the 90 days horizon Norwegian Air Shuttle is expected to under-perform the KINGBOARD CHEMICAL. In addition to that, Norwegian Air is 1.23 times more volatile than KINGBOARD CHEMICAL. It trades about -0.03 of its total potential returns per unit of risk. KINGBOARD CHEMICAL is currently generating about 0.22 per unit of volatility. If you would invest 226.00 in KINGBOARD CHEMICAL on November 5, 2024 and sell it today you would earn a total of 20.00 from holding KINGBOARD CHEMICAL or generate 8.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. KINGBOARD CHEMICAL
Performance |
| Timeline |
| Norwegian Air Shuttle |
| KINGBOARD CHEMICAL |
Norwegian Air and KINGBOARD CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and KINGBOARD CHEMICAL
The main advantage of trading using opposite Norwegian Air and KINGBOARD CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL will offset losses from the drop in KINGBOARD CHEMICAL'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 |
| KINGBOARD CHEMICAL vs. CullenFrost Bankers | KINGBOARD CHEMICAL vs. X FAB Silicon Foundries | KINGBOARD CHEMICAL vs. UNIQA INSURANCE GR | KINGBOARD CHEMICAL vs. SUN LIFE FINANCIAL |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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