Correlation Between NORWEGIAN AIR and Apple
Can any of the company-specific risk be diversified away by investing in both NORWEGIAN AIR and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on NORWEGIAN AIR and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORWEGIAN AIR and Apple.
Diversification Opportunities for NORWEGIAN AIR and Apple
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between NORWEGIAN and Apple is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding NORWEGIAN AIR SHUT and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple 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 SHUT are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of NORWEGIAN AIR i.e., NORWEGIAN AIR and Apple go up and down completely randomly.
Pair Corralation between NORWEGIAN AIR and Apple
Assuming the 90 days trading horizon NORWEGIAN AIR SHUT is expected to generate 1.85 times more return on investment than Apple. However, NORWEGIAN AIR is 1.85 times more volatile than Apple Inc. It trades about 0.21 of its potential returns per unit of risk. Apple Inc is currently generating about 0.1 per unit of risk. If you would invest 85.00 in NORWEGIAN AIR SHUT on August 28, 2024 and sell it today you would earn a total of 10.00 from holding NORWEGIAN AIR SHUT or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORWEGIAN AIR SHUT vs. Apple Inc
Performance |
| Timeline |
| NORWEGIAN AIR SHUT |
| Apple Inc |
NORWEGIAN AIR and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORWEGIAN AIR and Apple
The main advantage of trading using opposite NORWEGIAN AIR and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORWEGIAN AIR position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| NORWEGIAN AIR vs. Apple Inc | NORWEGIAN AIR vs. Apple Inc | NORWEGIAN AIR vs. Microsoft | NORWEGIAN AIR vs. Microsoft |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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