Correlation Between NORWEGIAN AIR and LAir Liquide
Can any of the company-specific risk be diversified away by investing in both NORWEGIAN AIR and LAir Liquide 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 LAir Liquide 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 LAir Liquide SA, you can compare the effects of market volatilities on NORWEGIAN AIR and LAir Liquide 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 LAir Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORWEGIAN AIR and LAir Liquide.
Diversification Opportunities for NORWEGIAN AIR and LAir Liquide
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NORWEGIAN and LAir is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding NORWEGIAN AIR SHUT and LAir Liquide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAir Liquide SA 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 LAir Liquide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAir Liquide SA has no effect on the direction of NORWEGIAN AIR i.e., NORWEGIAN AIR and LAir Liquide go up and down completely randomly.
Pair Corralation between NORWEGIAN AIR and LAir Liquide
Assuming the 90 days trading horizon NORWEGIAN AIR SHUT is expected to generate 1.82 times more return on investment than LAir Liquide. However, NORWEGIAN AIR is 1.82 times more volatile than LAir Liquide SA. It trades about 0.19 of its potential returns per unit of risk. LAir Liquide SA is currently generating about 0.25 per unit of risk. If you would invest 88.00 in NORWEGIAN AIR SHUT on December 4, 2024 and sell it today you would earn a total of 9.00 from holding NORWEGIAN AIR SHUT or generate 10.23% 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 SHUT vs. LAir Liquide SA
Performance |
| Timeline |
| NORWEGIAN AIR SHUT |
| LAir Liquide SA |
NORWEGIAN AIR and LAir Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORWEGIAN AIR and LAir Liquide
The main advantage of trading using opposite NORWEGIAN AIR and LAir Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORWEGIAN AIR position performs unexpectedly, LAir Liquide 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 LAir Liquide will offset losses from the drop in LAir Liquide's long position.| NORWEGIAN AIR vs. alstria office REIT AG | NORWEGIAN AIR vs. Ping An Insurance | NORWEGIAN AIR vs. Vienna Insurance Group | NORWEGIAN AIR vs. KENEDIX OFFICE INV |
| LAir Liquide vs. Infrastrutture Wireless Italiane | LAir Liquide vs. SBA Communications Corp | LAir Liquide vs. Diversified Healthcare Trust | LAir Liquide vs. tokentus investment AG |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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