Correlation Between Nordic Semiconductor and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Regions Financial 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 Regions Financial 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 Regions Financial Corp, you can compare the effects of market volatilities on Nordic Semiconductor and Regions Financial 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 Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Regions Financial.
Diversification Opportunities for Nordic Semiconductor and Regions Financial
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and Regions is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Regions Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial Corp 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 Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial Corp has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Regions Financial go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Regions Financial
Assuming the 90 days trading horizon Nordic Semiconductor ASA is expected to generate 1.73 times more return on investment than Regions Financial. However, Nordic Semiconductor is 1.73 times more volatile than Regions Financial Corp. It trades about 0.0 of its potential returns per unit of risk. Regions Financial Corp is currently generating about -0.16 per unit of risk. If you would invest 10,059 in Nordic Semiconductor ASA on September 15, 2024 and sell it today you would lose (42.00) from holding Nordic Semiconductor ASA or give up 0.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. Regions Financial Corp
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Regions Financial Corp |
Nordic Semiconductor and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Regions Financial
The main advantage of trading using opposite Nordic Semiconductor and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Regions Financial 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 Regions Financial will offset losses from the drop in Regions Financial's long position.| Nordic Semiconductor vs. Wheaton Precious Metals | Nordic Semiconductor vs. GoldMining | Nordic Semiconductor vs. Veolia Environnement VE | Nordic Semiconductor vs. Panther Metals PLC |
| Regions Financial vs. Samsung Electronics Co | Regions Financial vs. Samsung Electronics Co | Regions Financial vs. Hyundai Motor | Regions Financial vs. Reliance Industries Ltd |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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