Correlation Between Austevoll Seafood and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and Nordic Semiconductor 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 Austevoll Seafood and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austevoll Seafood ASA and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Austevoll Seafood and Nordic Semiconductor 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 Austevoll Seafood with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and Nordic Semiconductor.
Diversification Opportunities for Austevoll Seafood and Nordic Semiconductor
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Austevoll and Nordic is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Nordic Semiconductor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Semiconductor ASA and Austevoll Seafood 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 Austevoll Seafood ASA are associated (or correlated) with Nordic Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Semiconductor ASA has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Austevoll Seafood and Nordic Semiconductor
Assuming the 90 days trading horizon Austevoll Seafood is expected to generate 1.19 times less return on investment than Nordic Semiconductor. But when comparing it to its historical volatility, Austevoll Seafood ASA is 1.81 times less risky than Nordic Semiconductor. It trades about 0.39 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 10,021 in Nordic Semiconductor ASA on November 1, 2024 and sell it today you would earn a total of 1,292 from holding Nordic Semiconductor ASA or generate 12.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austevoll Seafood ASA vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Austevoll Seafood ASA |
| Nordic Semiconductor ASA |
Austevoll Seafood and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austevoll Seafood and Nordic Semiconductor
The main advantage of trading using opposite Austevoll Seafood and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, Nordic Semiconductor 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 Nordic Semiconductor will offset losses from the drop in Nordic Semiconductor's long position.| Austevoll Seafood vs. Nordic Semiconductor ASA | Austevoll Seafood vs. Intermediate Capital Group | Austevoll Seafood vs. LBG Media PLC | Austevoll Seafood vs. Travel Leisure Co |
| Nordic Semiconductor vs. Verizon Communications | Nordic Semiconductor vs. Adriatic Metals | Nordic Semiconductor vs. Cairo Communication SpA | Nordic Semiconductor vs. GreenX Metals |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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