Correlation Between Norwegian Air and Lendlease
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and Lendlease 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 Lendlease 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 Lendlease Group, you can compare the effects of market volatilities on Norwegian Air and Lendlease 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 Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and Lendlease.
Diversification Opportunities for Norwegian Air and Lendlease
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Norwegian and Lendlease is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group 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 Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of Norwegian Air i.e., Norwegian Air and Lendlease go up and down completely randomly.
Pair Corralation between Norwegian Air and Lendlease
Assuming the 90 days horizon Norwegian Air Shuttle is expected to under-perform the Lendlease. In addition to that, Norwegian Air is 1.6 times more volatile than Lendlease Group. It trades about -0.03 of its total potential returns per unit of risk. Lendlease Group is currently generating about 0.07 per unit of volatility. If you would invest 378.00 in Lendlease Group on November 5, 2024 and sell it today you would earn a total of 8.00 from holding Lendlease Group or generate 2.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. Lendlease Group
Performance |
| Timeline |
| Norwegian Air Shuttle |
| Lendlease Group |
Norwegian Air and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and Lendlease
The main advantage of trading using opposite Norwegian Air and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, Lendlease 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 Lendlease will offset losses from the drop in Lendlease'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 |
| Lendlease vs. QBE Insurance Group | Lendlease vs. Taiwan Semiconductor Manufacturing | Lendlease vs. MagnaChip Semiconductor Corp | Lendlease vs. UNIQA INSURANCE GR |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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