Correlation Between Norwegian Air and MCEWEN MINING
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and MCEWEN MINING 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 MCEWEN MINING 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 MCEWEN MINING INC, you can compare the effects of market volatilities on Norwegian Air and MCEWEN MINING 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 MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and MCEWEN MINING.
Diversification Opportunities for Norwegian Air and MCEWEN MINING
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Norwegian and MCEWEN is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and MCEWEN MINING INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCEWEN MINING INC 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 MCEWEN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCEWEN MINING INC has no effect on the direction of Norwegian Air i.e., Norwegian Air and MCEWEN MINING go up and down completely randomly.
Pair Corralation between Norwegian Air and MCEWEN MINING
Assuming the 90 days horizon Norwegian Air Shuttle is expected to generate 0.78 times more return on investment than MCEWEN MINING. However, Norwegian Air Shuttle is 1.28 times less risky than MCEWEN MINING. It trades about 0.18 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about -0.2 per unit of risk. If you would invest 87.00 in Norwegian Air Shuttle on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Norwegian Air Shuttle or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. MCEWEN MINING INC
Performance |
| Timeline |
| Norwegian Air Shuttle |
| MCEWEN MINING INC |
Norwegian Air and MCEWEN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and MCEWEN MINING
The main advantage of trading using opposite Norwegian Air and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, MCEWEN MINING 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 MCEWEN MINING will offset losses from the drop in MCEWEN MINING's long position.| Norwegian Air vs. NTG Nordic Transport | Norwegian Air vs. MINCO SILVER | Norwegian Air vs. Ming Le Sports | Norwegian Air vs. Sporttotal AG |
| MCEWEN MINING vs. COMMERCIAL VEHICLE | MCEWEN MINING vs. Pick n Pay | MCEWEN MINING vs. PICKN PAY STORES | MCEWEN MINING vs. Commercial Vehicle Group |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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