Correlation Between NORWEGIAN AIR and SCANSOURCE
Can any of the company-specific risk be diversified away by investing in both NORWEGIAN AIR and SCANSOURCE 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 SCANSOURCE 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 SCANSOURCE, you can compare the effects of market volatilities on NORWEGIAN AIR and SCANSOURCE 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 SCANSOURCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORWEGIAN AIR and SCANSOURCE.
Diversification Opportunities for NORWEGIAN AIR and SCANSOURCE
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between NORWEGIAN and SCANSOURCE is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding NORWEGIAN AIR SHUT and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE 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 SCANSOURCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANSOURCE has no effect on the direction of NORWEGIAN AIR i.e., NORWEGIAN AIR and SCANSOURCE go up and down completely randomly.
Pair Corralation between NORWEGIAN AIR and SCANSOURCE
Assuming the 90 days trading horizon NORWEGIAN AIR SHUT is expected to under-perform the SCANSOURCE. In addition to that, NORWEGIAN AIR is 1.17 times more volatile than SCANSOURCE. It trades about -0.03 of its total potential returns per unit of risk. SCANSOURCE is currently generating about 0.0 per unit of volatility. If you would invest 4,740 in SCANSOURCE on September 22, 2024 and sell it today you would lose (20.00) from holding SCANSOURCE or give up 0.42% 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. SCANSOURCE
Performance |
| Timeline |
| NORWEGIAN AIR SHUT |
| SCANSOURCE |
NORWEGIAN AIR and SCANSOURCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORWEGIAN AIR and SCANSOURCE
The main advantage of trading using opposite NORWEGIAN AIR and SCANSOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORWEGIAN AIR position performs unexpectedly, SCANSOURCE 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 SCANSOURCE will offset losses from the drop in SCANSOURCE's long position.| NORWEGIAN AIR vs. Fukuyama Transporting Co | NORWEGIAN AIR vs. QUEEN S ROAD | NORWEGIAN AIR vs. COPLAND ROAD CAPITAL | NORWEGIAN AIR vs. TEXAS ROADHOUSE |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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