Correlation Between Norfolk Southern and ScanTech

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

By analyzing existing cross correlation between Norfolk Southern and ScanTech AI Systems, you can compare the effects of market volatilities on Norfolk Southern and ScanTech 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 Norfolk Southern with a short position of ScanTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norfolk Southern and ScanTech.

Diversification Opportunities for Norfolk Southern and ScanTech

-0.69

Correlation Coefficient

Norfolk Southern  ScanTech

Excellent diversification

The 3 months correlation between Norfolk and ScanTech is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Norfolk Southern and ScanTech AI Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanTech AI Systems and Norfolk Southern 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 Norfolk Southern are associated (or correlated) with ScanTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanTech AI Systems has no effect on the direction of Norfolk Southern i.e., Norfolk Southern and ScanTech go up and down completely randomly.

Pair Corralation between Norfolk Southern and ScanTech

Considering the 90-day investment horizon Norfolk Southern is expected to generate 0.09 times more return on investment than ScanTech. However, Norfolk Southern is 11.3 times less risky than ScanTech. It trades about 0.24 of its potential returns per unit of risk. ScanTech AI Systems is currently generating about -0.05 per unit of risk. If you would invest  23,826  in Norfolk Southern on May 21, 2025 and sell it today you would earn a total of  4,153  from holding Norfolk Southern or generate 17.43% return on investment over 90 days.

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

Norfolk Southern  vs.  ScanTech AI Systems

Norfolk Southern

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Norfolk Southern are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Norfolk Southern exhibited solid returns over the last few months and may actually be approaching a breakup point.

ScanTech AI Systems

Risk-Adjusted Performance

Weakest

Over the last 90 days ScanTech AI Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Norfolk Southern and ScanTech

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

The idea behind Norfolk Southern and ScanTech AI Systems 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.