Correlation Between NORWEGIAN AIR and WIZZ AIR
Can any of the company-specific risk be diversified away by investing in both NORWEGIAN AIR and WIZZ 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 WIZZ 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 WIZZ AIR HLDGUNSPADR4, you can compare the effects of market volatilities on NORWEGIAN AIR and WIZZ 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 WIZZ AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORWEGIAN AIR and WIZZ AIR.
Diversification Opportunities for NORWEGIAN AIR and WIZZ AIR
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between NORWEGIAN and WIZZ is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding NORWEGIAN AIR SHUT and WIZZ AIR HLDGUNSPADR4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIZZ AIR HLDGUNSPADR4 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 WIZZ AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIZZ AIR HLDGUNSPADR4 has no effect on the direction of NORWEGIAN AIR i.e., NORWEGIAN AIR and WIZZ AIR go up and down completely randomly.
Pair Corralation between NORWEGIAN AIR and WIZZ AIR
Assuming the 90 days trading horizon NORWEGIAN AIR SHUT is expected to generate 0.75 times more return on investment than WIZZ AIR. However, NORWEGIAN AIR SHUT is 1.33 times less risky than WIZZ AIR. It trades about 0.19 of its potential returns per unit of risk. WIZZ AIR HLDGUNSPADR4 is currently generating about -0.08 per unit of risk. If you would invest 87.00 in NORWEGIAN AIR SHUT on August 31, 2024 and sell it today you would earn a total of 10.00 from holding NORWEGIAN AIR SHUT or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORWEGIAN AIR SHUT vs. WIZZ AIR HLDGUNSPADR4
Performance |
| Timeline |
| NORWEGIAN AIR SHUT |
| WIZZ AIR HLDGUNSPADR4 |
NORWEGIAN AIR and WIZZ AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORWEGIAN AIR and WIZZ AIR
The main advantage of trading using opposite NORWEGIAN AIR and WIZZ AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORWEGIAN AIR position performs unexpectedly, WIZZ 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 WIZZ AIR will offset losses from the drop in WIZZ AIR's long position.| NORWEGIAN AIR vs. SIVERS SEMICONDUCTORS AB | NORWEGIAN AIR vs. Darden Restaurants | NORWEGIAN AIR vs. Reliance Steel Aluminum | NORWEGIAN AIR vs. Q2M Managementberatung AG |
| WIZZ AIR vs. UET United Electronic | WIZZ AIR vs. CHEMICAL INDUSTRIES | WIZZ AIR vs. Nucletron Electronic Aktiengesellschaft | WIZZ AIR vs. AOI Electronics Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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