Correlation Between Nordic Semiconductor and Ironveld Plc

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Ironveld Plc 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 Ironveld Plc 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 Ironveld Plc, you can compare the effects of market volatilities on Nordic Semiconductor and Ironveld Plc 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 Ironveld Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Ironveld Plc.

Diversification Opportunities for Nordic Semiconductor and Ironveld Plc

0.32
  Correlation Coefficient

Weak diversification

The 3 months correlation between Nordic and Ironveld is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Ironveld Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ironveld Plc 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 Ironveld Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ironveld Plc has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Ironveld Plc go up and down completely randomly.

Pair Corralation between Nordic Semiconductor and Ironveld Plc

Assuming the 90 days trading horizon Nordic Semiconductor ASA is expected to generate 0.89 times more return on investment than Ironveld Plc. However, Nordic Semiconductor ASA is 1.13 times less risky than Ironveld Plc. It trades about -0.07 of its potential returns per unit of risk. Ironveld Plc is currently generating about -0.08 per unit of risk. If you would invest  14,035  in Nordic Semiconductor ASA on September 5, 2024 and sell it today you would lose (3,922) from holding Nordic Semiconductor ASA or give up 27.94% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Nordic Semiconductor ASA  vs.  Ironveld Plc

 Performance 
       Timeline  
Nordic Semiconductor ASA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Nordic Semiconductor ASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Ironveld Plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ironveld Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Nordic Semiconductor and Ironveld Plc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nordic Semiconductor and Ironveld Plc

The main advantage of trading using opposite Nordic Semiconductor and Ironveld Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Ironveld Plc 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 Ironveld Plc will offset losses from the drop in Ironveld Plc's long position.
The idea behind Nordic Semiconductor ASA and Ironveld Plc 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

Other Complementary Tools

Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes