Correlation Between Norwegian Air and AOI Electronics
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and AOI Electronics 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 AOI Electronics 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 AOI Electronics Co, you can compare the effects of market volatilities on Norwegian Air and AOI Electronics 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 AOI Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and AOI Electronics.
Diversification Opportunities for Norwegian Air and AOI Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Norwegian and AOI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and AOI Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOI Electronics 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 AOI Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOI Electronics has no effect on the direction of Norwegian Air i.e., Norwegian Air and AOI Electronics go up and down completely randomly.
Pair Corralation between Norwegian Air and AOI Electronics
If you would invest 83.00 in Norwegian Air Shuttle on August 29, 2024 and sell it today you would earn a total of 12.00 from holding Norwegian Air Shuttle or generate 14.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. AOI Electronics Co
Performance |
| Timeline |
| Norwegian Air Shuttle |
| AOI Electronics |
Norwegian Air and AOI Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and AOI Electronics
The main advantage of trading using opposite Norwegian Air and AOI Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, AOI Electronics 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 AOI Electronics will offset losses from the drop in AOI Electronics' long position.| Norwegian Air vs. Aena SME SA | Norwegian Air vs. Superior Plus Corp | Norwegian Air vs. NMI Holdings | Norwegian Air vs. SIVERS SEMICONDUCTORS AB |
| AOI Electronics vs. NVIDIA | AOI Electronics vs. Taiwan Semiconductor Manufacturing | AOI Electronics vs. Texas Instruments Incorporated | AOI Electronics vs. Advanced Micro Devices |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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