Correlation Between CREDIT and Norfolk Southern
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By analyzing existing cross correlation between CREDIT ACCEP P and Norfolk Southern, you can compare the effects of market volatilities on CREDIT and Norfolk Southern 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 CREDIT with a short position of Norfolk Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREDIT and Norfolk Southern.
Diversification Opportunities for CREDIT and Norfolk Southern
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CREDIT and Norfolk is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding CREDIT ACCEP P and Norfolk Southern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norfolk Southern and CREDIT 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 CREDIT ACCEP P are associated (or correlated) with Norfolk Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norfolk Southern has no effect on the direction of CREDIT i.e., CREDIT and Norfolk Southern go up and down completely randomly.
Pair Corralation between CREDIT and Norfolk Southern
Assuming the 90 days trading horizon CREDIT ACCEP P is expected to under-perform the Norfolk Southern. But the bond apears to be less risky and, when comparing its historical volatility, CREDIT ACCEP P is 4.16 times less risky than Norfolk Southern. The bond trades about 0.0 of its potential returns per unit of risk. The Norfolk Southern is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 25,009 in Norfolk Southern on September 2, 2024 and sell it today you would earn a total of 2,576 from holding Norfolk Southern or generate 10.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
CREDIT ACCEP P vs. Norfolk Southern
Performance |
| Timeline |
| CREDIT ACCEP P |
| Norfolk Southern |
CREDIT and Norfolk Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CREDIT and Norfolk Southern
The main advantage of trading using opposite CREDIT and Norfolk Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CREDIT position performs unexpectedly, Norfolk Southern 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 Norfolk Southern will offset losses from the drop in Norfolk Southern's long position.| CREDIT vs. BorgWarner | CREDIT vs. Magna International | CREDIT vs. Meiwu Technology Co | CREDIT vs. Tradeweb Markets |
| Norfolk Southern vs. Union Pacific | Norfolk Southern vs. Westinghouse Air Brake | Norfolk Southern vs. Trinity Industries | Norfolk Southern vs. Greenbrier Companies |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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