Correlation Between STRAYER EDUCATION and Norwegian Air
Can any of the company-specific risk be diversified away by investing in both STRAYER EDUCATION 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 STRAYER EDUCATION and Norwegian Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAYER EDUCATION and Norwegian Air Shuttle, you can compare the effects of market volatilities on STRAYER EDUCATION 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 STRAYER EDUCATION with a short position of Norwegian Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and Norwegian Air.
Diversification Opportunities for STRAYER EDUCATION and Norwegian Air
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STRAYER and Norwegian is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION 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 STRAYER EDUCATION 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 STRAYER EDUCATION 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 STRAYER EDUCATION i.e., STRAYER EDUCATION and Norwegian Air go up and down completely randomly.
Pair Corralation between STRAYER EDUCATION and Norwegian Air
Assuming the 90 days trading horizon STRAYER EDUCATION is expected to generate 0.6 times more return on investment than Norwegian Air. However, STRAYER EDUCATION is 1.66 times less risky than Norwegian Air. It trades about 0.29 of its potential returns per unit of risk. Norwegian Air Shuttle is currently generating about 0.03 per unit of risk. If you would invest 8,000 in STRAYER EDUCATION on August 25, 2024 and sell it today you would earn a total of 1,150 from holding STRAYER EDUCATION or generate 14.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
STRAYER EDUCATION vs. Norwegian Air Shuttle
Performance |
| Timeline |
| STRAYER EDUCATION |
| Norwegian Air Shuttle |
STRAYER EDUCATION and Norwegian Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAYER EDUCATION and Norwegian Air
The main advantage of trading using opposite STRAYER EDUCATION and Norwegian Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAYER EDUCATION 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.| STRAYER EDUCATION vs. REGAL ASIAN INVESTMENTS | STRAYER EDUCATION vs. AOYAMA TRADING | STRAYER EDUCATION vs. Laureate Education | STRAYER EDUCATION vs. Gladstone Investment |
| Norwegian Air vs. Airports of Thailand | Norwegian Air vs. Airports of Thailand | Norwegian Air vs. Aena SME SA | Norwegian Air vs. AerCap Holdings NV |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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