Correlation Between Nok Airlines and ALVGR

Can any of the company-specific risk be diversified away by investing in both Nok Airlines and ALVGR 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 Nok Airlines and ALVGR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nok Airlines Public and ALVGR 35, you can compare the effects of market volatilities on Nok Airlines and ALVGR 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 Nok Airlines with a short position of ALVGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nok Airlines and ALVGR.

Diversification Opportunities for Nok Airlines and ALVGR

0.0

Correlation Coefficient

Nok Airlines  ALVGR

Pay attention - limited upside

The 3 months correlation between Nok and ALVGR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nok Airlines Public and ALVGR 35 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALVGR 35 and Nok Airlines 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 Nok Airlines Public are associated (or correlated) with ALVGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALVGR 35 has no effect on the direction of Nok Airlines i.e., Nok Airlines and ALVGR go up and down completely randomly.

Pair Corralation between Nok Airlines and ALVGR

If you would invest  9,606  in ALVGR 35 on December 2, 2024 and sell it today you would earn a total of  164.00  from holding ALVGR 35 or generate 1.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	37.7%
Values	Daily Returns

Nok Airlines Public  vs.  ALVGR 35

Nok Airlines Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nok Airlines Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Nok Airlines is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ALVGR 35

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ALVGR 35 are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ALVGR is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nok Airlines and ALVGR

The main advantage of trading using opposite Nok Airlines and ALVGR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nok Airlines position performs unexpectedly, ALVGR 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 ALVGR will offset losses from the drop in ALVGR's long position.

The idea behind Nok Airlines Public and ALVGR 35 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.