Correlation Between Norwegian Air and Caseys General

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

By analyzing existing cross correlation between Norwegian Air Shuttle and Caseys General Stores, you can compare the effects of market volatilities on Norwegian Air and Caseys General 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 Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norwegian Air and Caseys General.

Diversification Opportunities for Norwegian Air and Caseys General

0.44

Correlation Coefficient

Norwegian Air  Caseys General

Very weak diversification

The 3 months correlation between Norwegian and Caseys is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and Caseys General Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caseys General 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 Shuttle are associated (or correlated) with Caseys General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caseys General Stores has no effect on the direction of Norwegian Air i.e., Norwegian Air and Caseys General go up and down completely randomly.

Pair Corralation between Norwegian Air and Caseys General

Assuming the 90 days horizon Norwegian Air Shuttle is expected to generate 1.23 times more return on investment than Caseys General. However, Norwegian Air is 1.23 times more volatile than Caseys General Stores. It trades about 0.18 of its potential returns per unit of risk. Caseys General Stores is currently generating about 0.06 per unit of risk. If you would invest  111.00  in Norwegian Air Shuttle on April 23, 2025 and sell it today you would earn a total of  38.00  from holding Norwegian Air Shuttle or generate 34.23% return on investment over 90 days.

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

Norwegian Air Shuttle  vs.  Caseys General Stores

Norwegian Air Shuttle

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Norwegian Air Shuttle are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Norwegian Air reported solid returns over the last few months and may actually be approaching a breakup point.

Caseys General Stores

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Caseys General may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Norwegian Air and Caseys General

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

The idea behind Norwegian Air Shuttle and Caseys General 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.