Correlation Between NORWEGIAN AIR and United Natural

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

Diversification Opportunities for NORWEGIAN AIR and United Natural

-0.18

Correlation Coefficient

NORWEGIAN AIR  United Natural

Good diversification

The 3 months correlation between NORWEGIAN and United is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding NORWEGIAN AIR SHUT and United Natural Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Natural Foods 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 United Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Natural Foods has no effect on the direction of NORWEGIAN AIR i.e., NORWEGIAN AIR and United Natural go up and down completely randomly.

Pair Corralation between NORWEGIAN AIR and United Natural

Assuming the 90 days trading horizon NORWEGIAN AIR is expected to generate 2.09 times less return on investment than United Natural. In addition to that, NORWEGIAN AIR is 1.03 times more volatile than United Natural Foods. It trades about 0.16 of its total potential returns per unit of risk. United Natural Foods is currently generating about 0.34 per unit of volatility. If you would invest  1,888  in United Natural Foods on September 1, 2024 and sell it today you would earn a total of  402.00  from holding United Natural Foods or generate 21.29% 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.  United Natural Foods

NORWEGIAN AIR SHUT

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NORWEGIAN AIR SHUT are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, NORWEGIAN AIR is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

United Natural Foods

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Natural Foods are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, United Natural reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NORWEGIAN AIR and United Natural

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

The idea behind NORWEGIAN AIR SHUT and United Natural Foods 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.