Correlation Between NORWEGIAN AIR and Carnegie Clean
Can any of the company-specific risk be diversified away by investing in both NORWEGIAN AIR and Carnegie Clean 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 Carnegie Clean 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 Carnegie Clean Energy, you can compare the effects of market volatilities on NORWEGIAN AIR and Carnegie Clean 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 Carnegie Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORWEGIAN AIR and Carnegie Clean.
Diversification Opportunities for NORWEGIAN AIR and Carnegie Clean
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between NORWEGIAN and Carnegie is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding NORWEGIAN AIR SHUT and Carnegie Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Clean Energy 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 Carnegie Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Clean Energy has no effect on the direction of NORWEGIAN AIR i.e., NORWEGIAN AIR and Carnegie Clean go up and down completely randomly.
Pair Corralation between NORWEGIAN AIR and Carnegie Clean
Assuming the 90 days trading horizon NORWEGIAN AIR SHUT is expected to generate 0.41 times more return on investment than Carnegie Clean. However, NORWEGIAN AIR SHUT is 2.44 times less risky than Carnegie Clean. It trades about 0.02 of its potential returns per unit of risk. Carnegie Clean Energy is currently generating about 0.01 per unit of risk. If you would invest 83.00 in NORWEGIAN AIR SHUT on September 16, 2024 and sell it today you would earn a total of 13.00 from holding NORWEGIAN AIR SHUT or generate 15.66% 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. Carnegie Clean Energy
Performance |
| Timeline |
| NORWEGIAN AIR SHUT |
| Carnegie Clean Energy |
NORWEGIAN AIR and Carnegie Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORWEGIAN AIR and Carnegie Clean
The main advantage of trading using opposite NORWEGIAN AIR and Carnegie Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORWEGIAN AIR position performs unexpectedly, Carnegie Clean 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 Carnegie Clean will offset losses from the drop in Carnegie Clean's long position.| NORWEGIAN AIR vs. Apple Inc | NORWEGIAN AIR vs. Apple Inc | NORWEGIAN AIR vs. Apple Inc | NORWEGIAN AIR vs. Apple Inc |
| Carnegie Clean vs. DELTA AIR LINES | Carnegie Clean vs. Alaska Air Group | Carnegie Clean vs. NORWEGIAN AIR SHUT | Carnegie Clean vs. SCANSOURCE |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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