Correlation Between Norwegian Air and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both Norwegian Air and Westinghouse Air 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 Westinghouse Air 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 Westinghouse Air Brake, you can compare the effects of market volatilities on Norwegian Air and Westinghouse Air 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 Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and Westinghouse Air.
Diversification Opportunities for Norwegian Air and Westinghouse Air
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Norwegian and Westinghouse is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and Westinghouse Air Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westinghouse Air Brake 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 Westinghouse Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westinghouse Air Brake has no effect on the direction of Norwegian Air i.e., Norwegian Air and Westinghouse Air go up and down completely randomly.
Pair Corralation between Norwegian Air and Westinghouse Air
Assuming the 90 days horizon Norwegian Air Shuttle is expected to under-perform the Westinghouse Air. In addition to that, Norwegian Air is 3.26 times more volatile than Westinghouse Air Brake. It trades about -0.07 of its total potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.52 per unit of volatility. If you would invest 18,340 in Westinghouse Air Brake on October 26, 2024 and sell it today you would earn a total of 1,525 from holding Westinghouse Air Brake or generate 8.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Norwegian Air Shuttle vs. Westinghouse Air Brake
Performance |
| Timeline |
| Norwegian Air Shuttle |
| Westinghouse Air Brake |
Norwegian Air and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norwegian Air and Westinghouse Air
The main advantage of trading using opposite Norwegian Air and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norwegian Air position performs unexpectedly, Westinghouse Air 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 Westinghouse Air will offset losses from the drop in Westinghouse Air's long position.| Norwegian Air vs. JAPAN TOBACCO UNSPADR12 | Norwegian Air vs. DATADOT TECHNOLOGY | Norwegian Air vs. IMPERIAL TOBACCO | Norwegian Air vs. Linedata Services SA |
| Westinghouse Air vs. InPlay Oil Corp | Westinghouse Air vs. Gaming and Leisure | Westinghouse Air vs. CODERE ONLINE LUX | Westinghouse Air vs. CarsalesCom |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |