Correlation Between NORWEGIAN AIR and Acadia Healthcare
Can any of the company-specific risk be diversified away by investing in both NORWEGIAN AIR and Acadia Healthcare 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 Acadia Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NORWEGIAN AIR SHUT and Acadia Healthcare, you can compare the effects of market volatilities on NORWEGIAN AIR and Acadia Healthcare 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 Acadia Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORWEGIAN AIR and Acadia Healthcare.
Diversification Opportunities for NORWEGIAN AIR and Acadia Healthcare
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NORWEGIAN and Acadia is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding NORWEGIAN AIR SHUT and Acadia Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Healthcare 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 SHUT are associated (or correlated) with Acadia Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Healthcare has no effect on the direction of NORWEGIAN AIR i.e., NORWEGIAN AIR and Acadia Healthcare go up and down completely randomly.
Pair Corralation between NORWEGIAN AIR and Acadia Healthcare
Assuming the 90 days trading horizon NORWEGIAN AIR SHUT is expected to under-perform the Acadia Healthcare. In addition to that, NORWEGIAN AIR is 1.07 times more volatile than Acadia Healthcare. It trades about -0.06 of its total potential returns per unit of risk. Acadia Healthcare is currently generating about 0.04 per unit of volatility. If you would invest 4,280 in Acadia Healthcare on November 6, 2024 and sell it today you would earn a total of 60.00 from holding Acadia Healthcare or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORWEGIAN AIR SHUT vs. Acadia Healthcare
Performance |
| Timeline |
| NORWEGIAN AIR SHUT |
| Acadia Healthcare |
NORWEGIAN AIR and Acadia Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORWEGIAN AIR and Acadia Healthcare
The main advantage of trading using opposite NORWEGIAN AIR and Acadia Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORWEGIAN AIR position performs unexpectedly, Acadia Healthcare 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 Acadia Healthcare will offset losses from the drop in Acadia Healthcare's long position.| NORWEGIAN AIR vs. Scandinavian Tobacco Group | NORWEGIAN AIR vs. HK Electric Investments | NORWEGIAN AIR vs. Western Copper and | NORWEGIAN AIR vs. AOYAMA TRADING |
| Acadia Healthcare vs. ADRIATIC METALS LS 013355 | Acadia Healthcare vs. Cairo Communication SpA | Acadia Healthcare vs. Fortescue Metals Group | Acadia Healthcare vs. CORNISH METALS INC |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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