Correlation Between Norwegian Air and Webull Warrants

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

Diversification Opportunities for Norwegian Air and Webull Warrants

0.74

Correlation Coefficient

Norwegian Air  Webull Warrants

Poor diversification

The 3 months correlation between Norwegian and Webull is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Norwegian Air Shuttle and Webull Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webull Warrants 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 Webull Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Webull Warrants has no effect on the direction of Norwegian Air i.e., Norwegian Air and Webull Warrants go up and down completely randomly.

Pair Corralation between Norwegian Air and Webull Warrants

Assuming the 90 days horizon Norwegian Air is expected to generate 4.74 times less return on investment than Webull Warrants. But when comparing it to its historical volatility, Norwegian Air Shuttle is 2.5 times less risky than Webull Warrants. It trades about 0.08 of its potential returns per unit of risk. Webull Warrants is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  249.00  in Webull Warrants on May 5, 2025 and sell it today you would earn a total of  280.00  from holding Webull Warrants or generate 112.45% return on investment over 90 days.

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

Norwegian Air Shuttle  vs.  Webull Warrants

Norwegian Air Shuttle

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Norwegian Air Shuttle are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Norwegian Air reported solid returns over the last few months and may actually be approaching a breakup point.

Webull Warrants

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Webull Warrants are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Webull Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Norwegian Air and Webull Warrants

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

The idea behind Norwegian Air Shuttle and Webull Warrants 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.