Correlation Between NORWEGIAN AIR and PICKN PAY

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

Diversification Opportunities for NORWEGIAN AIR and PICKN PAY

0.27

Correlation Coefficient

NORWEGIAN AIR  PICKN PAY

Modest diversification

The 3 months correlation between NORWEGIAN and PICKN is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding NORWEGIAN AIR SHUT and PICKN PAY STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICKN PAY STORES 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 PICKN PAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICKN PAY STORES has no effect on the direction of NORWEGIAN AIR i.e., NORWEGIAN AIR and PICKN PAY go up and down completely randomly.

Pair Corralation between NORWEGIAN AIR and PICKN PAY

Assuming the 90 days trading horizon NORWEGIAN AIR SHUT is expected to generate 1.4 times more return on investment than PICKN PAY. However, NORWEGIAN AIR is 1.4 times more volatile than PICKN PAY STORES. It trades about -0.1 of its potential returns per unit of risk. PICKN PAY STORES is currently generating about -0.15 per unit of risk. If you would invest  94.00  in NORWEGIAN AIR SHUT on October 15, 2024 and sell it today you would lose (4.00) from holding NORWEGIAN AIR SHUT or give up 4.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

NORWEGIAN AIR SHUT  vs.  PICKN PAY STORES

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 fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

PICKN PAY STORES

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PICKN PAY STORES are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, PICKN PAY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with NORWEGIAN AIR and PICKN PAY

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

The idea behind NORWEGIAN AIR SHUT and PICKN PAY STORES 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.