Correlation Between NORWEGIAN AIR and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both NORWEGIAN AIR and Norwegian Air 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 Norwegian Air 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 Norwegian Air Shuttle, you can compare the effects of market volatilities on NORWEGIAN AIR and Norwegian Air 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 Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORWEGIAN AIR and Norwegian Air.
Diversification Opportunities for NORWEGIAN AIR and Norwegian Air
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NORWEGIAN and Norwegian is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding NORWEGIAN AIR SHUT and Norwegian Air Shuttle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norwegian Air Shuttle 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 Norwegian Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norwegian Air Shuttle has no effect on the direction of NORWEGIAN AIR i.e., NORWEGIAN AIR and Norwegian Air go up and down completely randomly.
Pair Corralation between NORWEGIAN AIR and Norwegian Air
Assuming the 90 days trading horizon NORWEGIAN AIR SHUT is expected to under-perform the Norwegian Air. In addition to that, NORWEGIAN AIR is 1.01 times more volatile than Norwegian Air Shuttle. It trades about -0.07 of its total potential returns per unit of risk. Norwegian Air Shuttle is currently generating about -0.07 per unit of volatility. If you would invest 93.00 in Norwegian Air Shuttle on October 26, 2024 and sell it today you would lose (4.00) from holding Norwegian Air Shuttle or give up 4.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
NORWEGIAN AIR SHUT vs. Norwegian Air Shuttle
Performance |
| Timeline |
| NORWEGIAN AIR SHUT |
| Norwegian Air Shuttle |
NORWEGIAN AIR and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORWEGIAN AIR and Norwegian Air
The main advantage of trading using opposite NORWEGIAN AIR and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORWEGIAN AIR position performs unexpectedly, Norwegian Air 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 Norwegian Air will offset losses from the drop in Norwegian Air's long position.| NORWEGIAN AIR vs. MeVis Medical Solutions | NORWEGIAN AIR vs. IMAGIN MEDICAL INC | NORWEGIAN AIR vs. Sims Metal Management | NORWEGIAN AIR vs. Cleanaway Waste Management |
| Norwegian Air vs. JAPAN TOBACCO UNSPADR12 | Norwegian Air vs. DATADOT TECHNOLOGY | Norwegian Air vs. IMPERIAL TOBACCO | Norwegian Air vs. Linedata Services SA |
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.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |