Correlation Between Nordic Semiconductor and Hershey
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Hershey 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 Nordic Semiconductor and Hershey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Semiconductor ASA and Hershey Co, you can compare the effects of market volatilities on Nordic Semiconductor and Hershey 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 Nordic Semiconductor with a short position of Hershey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Hershey.
Diversification Opportunities for Nordic Semiconductor and Hershey
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nordic and Hershey is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Hershey Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hershey and Nordic Semiconductor 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 Nordic Semiconductor ASA are associated (or correlated) with Hershey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hershey has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Hershey go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Hershey
Assuming the 90 days trading horizon Nordic Semiconductor ASA is expected to generate 1.5 times more return on investment than Hershey. However, Nordic Semiconductor is 1.5 times more volatile than Hershey Co. It trades about 0.27 of its potential returns per unit of risk. Hershey Co is currently generating about -0.52 per unit of risk. If you would invest 10,017 in Nordic Semiconductor ASA on October 14, 2024 and sell it today you would earn a total of 926.00 from holding Nordic Semiconductor ASA or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. Hershey Co
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Hershey |
Nordic Semiconductor and Hershey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Hershey
The main advantage of trading using opposite Nordic Semiconductor and Hershey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Hershey 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 Hershey will offset losses from the drop in Hershey's long position.| Nordic Semiconductor vs. Monster Beverage Corp | Nordic Semiconductor vs. Tyson Foods Cl | Nordic Semiconductor vs. Vienna Insurance Group | Nordic Semiconductor vs. Edita Food Industries |
| Hershey vs. Ryanair Holdings plc | Hershey vs. Tyson Foods Cl | Hershey vs. Sligro Food Group | Hershey vs. Norwegian Air Shuttle |
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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