Correlation Between NORWEGIAN AIR and China Resources
Can any of the company-specific risk be diversified away by investing in both NORWEGIAN AIR and China Resources 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 China Resources 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 China Resources Gas, you can compare the effects of market volatilities on NORWEGIAN AIR and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORWEGIAN AIR and China Resources.
Diversification Opportunities for NORWEGIAN AIR and China Resources
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NORWEGIAN and China is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding NORWEGIAN AIR SHUT and China Resources Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Gas 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Gas has no effect on the direction of NORWEGIAN AIR i.e., NORWEGIAN AIR and China Resources go up and down completely randomly.
Pair Corralation between NORWEGIAN AIR and China Resources
Assuming the 90 days trading horizon NORWEGIAN AIR SHUT is expected to generate 1.47 times more return on investment than China Resources. However, NORWEGIAN AIR is 1.47 times more volatile than China Resources Gas. It trades about -0.12 of its potential returns per unit of risk. China Resources Gas is currently generating about -0.31 per unit of risk. If you would invest 93.00 in NORWEGIAN AIR SHUT on October 25, 2024 and sell it today you would lose (6.00) from holding NORWEGIAN AIR SHUT or give up 6.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORWEGIAN AIR SHUT vs. China Resources Gas
Performance |
| Timeline |
| NORWEGIAN AIR SHUT |
| China Resources Gas |
NORWEGIAN AIR and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORWEGIAN AIR and China Resources
The main advantage of trading using opposite NORWEGIAN AIR and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORWEGIAN AIR position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| NORWEGIAN AIR vs. Canadian Utilities Limited | NORWEGIAN AIR vs. NORTHEAST UTILITIES | NORWEGIAN AIR vs. HANOVER INSURANCE | NORWEGIAN AIR vs. Reinsurance Group of |
| China Resources vs. Westinghouse Air Brake | China Resources vs. Pentair plc | China Resources vs. Corsair Gaming | China Resources vs. SOGECLAIR SA INH |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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