Correlation Between NORWEGIAN AIR and Scientific Games
Can any of the company-specific risk be diversified away by investing in both NORWEGIAN AIR and Scientific Games 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 Scientific Games 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 Scientific Games, you can compare the effects of market volatilities on NORWEGIAN AIR and Scientific Games 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 Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORWEGIAN AIR and Scientific Games.
Diversification Opportunities for NORWEGIAN AIR and Scientific Games
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NORWEGIAN and Scientific is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding NORWEGIAN AIR SHUT and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games 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 Scientific Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scientific Games has no effect on the direction of NORWEGIAN AIR i.e., NORWEGIAN AIR and Scientific Games go up and down completely randomly.
Pair Corralation between NORWEGIAN AIR and Scientific Games
Assuming the 90 days trading horizon NORWEGIAN AIR SHUT is expected to under-perform the Scientific Games. In addition to that, NORWEGIAN AIR is 1.93 times more volatile than Scientific Games. It trades about -0.09 of its total potential returns per unit of risk. Scientific Games is currently generating about 0.03 per unit of volatility. If you would invest 8,250 in Scientific Games on October 28, 2024 and sell it today you would earn a total of 50.00 from holding Scientific Games or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORWEGIAN AIR SHUT vs. Scientific Games
Performance |
| Timeline |
| NORWEGIAN AIR SHUT |
| Scientific Games |
NORWEGIAN AIR and Scientific Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORWEGIAN AIR and Scientific Games
The main advantage of trading using opposite NORWEGIAN AIR and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORWEGIAN AIR position performs unexpectedly, Scientific Games 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 Scientific Games will offset losses from the drop in Scientific Games' long position.| NORWEGIAN AIR vs. Apple Inc | NORWEGIAN AIR vs. Apple Inc | NORWEGIAN AIR vs. Apple Inc | NORWEGIAN AIR vs. Apple Inc |
| Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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