Correlation Between NORWEGIAN AIR and KORIAN
Can any of the company-specific risk be diversified away by investing in both NORWEGIAN AIR and KORIAN 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 KORIAN 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 KORIAN, you can compare the effects of market volatilities on NORWEGIAN AIR and KORIAN 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 KORIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORWEGIAN AIR and KORIAN.
Diversification Opportunities for NORWEGIAN AIR and KORIAN
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between NORWEGIAN and KORIAN is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding NORWEGIAN AIR SHUT and KORIAN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KORIAN 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 KORIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KORIAN has no effect on the direction of NORWEGIAN AIR i.e., NORWEGIAN AIR and KORIAN go up and down completely randomly.
Pair Corralation between NORWEGIAN AIR and KORIAN
Assuming the 90 days trading horizon NORWEGIAN AIR is expected to generate 35.02 times less return on investment than KORIAN. But when comparing it to its historical volatility, NORWEGIAN AIR SHUT is 36.45 times less risky than KORIAN. It trades about 0.22 of its potential returns per unit of risk. KORIAN is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 210.00 in KORIAN on August 27, 2024 and sell it today you would earn a total of 712.00 from holding KORIAN or generate 339.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORWEGIAN AIR SHUT vs. KORIAN
Performance |
| Timeline |
| NORWEGIAN AIR SHUT |
| KORIAN |
NORWEGIAN AIR and KORIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORWEGIAN AIR and KORIAN
The main advantage of trading using opposite NORWEGIAN AIR and KORIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORWEGIAN AIR position performs unexpectedly, KORIAN 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 KORIAN will offset losses from the drop in KORIAN's long position.| NORWEGIAN AIR vs. LION ONE METALS | NORWEGIAN AIR vs. Gold Road Resources | NORWEGIAN AIR vs. FIREWEED METALS P | NORWEGIAN AIR vs. GREENX METALS LTD |
| KORIAN vs. NORWEGIAN AIR SHUT | KORIAN vs. International Game Technology | KORIAN vs. GigaMedia | KORIAN vs. OURGAME INTHOLDL 00005 |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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