Correlation Between NORWEGIAN AIR and Shimano
Can any of the company-specific risk be diversified away by investing in both NORWEGIAN AIR and Shimano 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 Shimano 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 Shimano, you can compare the effects of market volatilities on NORWEGIAN AIR and Shimano 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 Shimano. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORWEGIAN AIR and Shimano.
Diversification Opportunities for NORWEGIAN AIR and Shimano
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NORWEGIAN and Shimano is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding NORWEGIAN AIR SHUT and Shimano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimano 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 Shimano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimano has no effect on the direction of NORWEGIAN AIR i.e., NORWEGIAN AIR and Shimano go up and down completely randomly.
Pair Corralation between NORWEGIAN AIR and Shimano
Assuming the 90 days trading horizon NORWEGIAN AIR SHUT is expected to generate 1.35 times more return on investment than Shimano. However, NORWEGIAN AIR is 1.35 times more volatile than Shimano. It trades about 0.19 of its potential returns per unit of risk. Shimano is currently generating about -0.04 per unit of risk. If you would invest 84.00 in NORWEGIAN AIR SHUT on September 5, 2024 and sell it today you would earn a total of 10.00 from holding NORWEGIAN AIR SHUT or generate 11.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
NORWEGIAN AIR SHUT vs. Shimano
Performance |
| Timeline |
| NORWEGIAN AIR SHUT |
| Shimano |
NORWEGIAN AIR and Shimano Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORWEGIAN AIR and Shimano
The main advantage of trading using opposite NORWEGIAN AIR and Shimano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORWEGIAN AIR position performs unexpectedly, Shimano 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 Shimano will offset losses from the drop in Shimano's long position.| NORWEGIAN AIR vs. TOTAL GABON | NORWEGIAN AIR vs. Walgreens Boots Alliance | NORWEGIAN AIR vs. Peak Resources Limited |
| Shimano vs. Li Ning Company | Shimano vs. SHIMANO INC UNSPADR10 | Shimano vs. Superior Plus Corp | Shimano vs. NMI Holdings |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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