Correlation Between NORWEGIAN AIR and Walker Dunlop

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

Diversification Opportunities for NORWEGIAN AIR and Walker Dunlop

-0.02

Correlation Coefficient

NORWEGIAN AIR  Walker Dunlop

Good diversification

The 3 months correlation between NORWEGIAN and Walker is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding NORWEGIAN AIR SHUT and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop 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 Walker Dunlop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walker Dunlop has no effect on the direction of NORWEGIAN AIR i.e., NORWEGIAN AIR and Walker Dunlop go up and down completely randomly.

Pair Corralation between NORWEGIAN AIR and Walker Dunlop

Assuming the 90 days trading horizon NORWEGIAN AIR SHUT is expected to generate 1.4 times more return on investment than Walker Dunlop. However, NORWEGIAN AIR is 1.4 times more volatile than Walker Dunlop. It trades about 0.03 of its potential returns per unit of risk. Walker Dunlop is currently generating about 0.03 per unit of risk. If you would invest  74.00  in NORWEGIAN AIR SHUT on October 4, 2024 and sell it today you would earn a total of  17.00  from holding NORWEGIAN AIR SHUT or generate 22.97% 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.  Walker Dunlop

NORWEGIAN AIR SHUT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NORWEGIAN AIR SHUT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Walker Dunlop

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Walker Dunlop has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with NORWEGIAN AIR and Walker Dunlop

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

The idea behind NORWEGIAN AIR SHUT and Walker Dunlop 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.