Correlation Between Nok Airlines and Universal

Can any of the company-specific risk be diversified away by investing in both Nok Airlines and Universal 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 Universal 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 Universal, you can compare the effects of market volatilities on Nok Airlines and Universal 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 Universal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nok Airlines and Universal.

Diversification Opportunities for Nok Airlines and Universal

0.0

Correlation Coefficient

Nok Airlines  Universal

Pay attention - limited upside

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

Pair Corralation between Nok Airlines and Universal

If you would invest  5,089  in Universal on October 3, 2024 and sell it today you would earn a total of  395.00  from holding Universal or generate 7.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nok Airlines Public  vs.  Universal

Nok Airlines Public

Risk-Adjusted Performance

0 of 100

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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Universal

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Universal are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Universal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Nok Airlines and Universal

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

The idea behind Nok Airlines Public and Universal 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .