Correlation Between NORWEGIAN AIR and Natural Health
Can any of the company-specific risk be diversified away by investing in both NORWEGIAN AIR and Natural Health 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 Natural Health 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 Natural Health Trends, you can compare the effects of market volatilities on NORWEGIAN AIR and Natural Health 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 Natural Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORWEGIAN AIR and Natural Health.
Diversification Opportunities for NORWEGIAN AIR and Natural Health
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NORWEGIAN and Natural is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding NORWEGIAN AIR SHUT and Natural Health Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Health Trends 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 Natural Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Health Trends has no effect on the direction of NORWEGIAN AIR i.e., NORWEGIAN AIR and Natural Health go up and down completely randomly.
Pair Corralation between NORWEGIAN AIR and Natural Health
Assuming the 90 days trading horizon NORWEGIAN AIR SHUT is expected to under-perform the Natural Health. In addition to that, NORWEGIAN AIR is 1.36 times more volatile than Natural Health Trends. It trades about -0.07 of its total potential returns per unit of risk. Natural Health Trends is currently generating about -0.03 per unit of volatility. If you would invest 576.00 in Natural Health Trends on September 3, 2024 and sell it today you would lose (66.00) from holding Natural Health Trends or give up 11.46% 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. Natural Health Trends
Performance |
| Timeline |
| NORWEGIAN AIR SHUT |
| Natural Health Trends |
NORWEGIAN AIR and Natural Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORWEGIAN AIR and Natural Health
The main advantage of trading using opposite NORWEGIAN AIR and Natural Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORWEGIAN AIR position performs unexpectedly, Natural Health 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 Natural Health will offset losses from the drop in Natural Health's long position.| NORWEGIAN AIR vs. TOTAL GABON | NORWEGIAN AIR vs. Walgreens Boots Alliance | NORWEGIAN AIR vs. Peak Resources Limited |
| Natural Health vs. CITY OFFICE REIT | Natural Health vs. WillScot Mobile Mini | Natural Health vs. KIMBALL ELECTRONICS | Natural Health vs. ELECTRONIC ARTS |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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