Correlation Between Nordic Semiconductor and IShares Physical
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and IShares Physical 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 IShares Physical 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 iShares Physical Silver, you can compare the effects of market volatilities on Nordic Semiconductor and IShares Physical 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 IShares Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and IShares Physical.
Diversification Opportunities for Nordic Semiconductor and IShares Physical
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nordic and IShares is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and iShares Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Physical Silver 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 IShares Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Physical Silver has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and IShares Physical go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and IShares Physical
Assuming the 90 days trading horizon Nordic Semiconductor ASA is expected to generate 1.87 times more return on investment than IShares Physical. However, Nordic Semiconductor is 1.87 times more volatile than iShares Physical Silver. It trades about 0.2 of its potential returns per unit of risk. iShares Physical Silver is currently generating about 0.21 per unit of risk. If you would invest 10,373 in Nordic Semiconductor ASA on November 4, 2024 and sell it today you would earn a total of 1,077 from holding Nordic Semiconductor ASA or generate 10.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. iShares Physical Silver
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| iShares Physical Silver |
Nordic Semiconductor and IShares Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and IShares Physical
The main advantage of trading using opposite Nordic Semiconductor and IShares Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, IShares Physical 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 IShares Physical will offset losses from the drop in IShares Physical's long position.| Nordic Semiconductor vs. Xeros Technology Group | Nordic Semiconductor vs. Roper Technologies | Nordic Semiconductor vs. Pressure Technologies Plc | Nordic Semiconductor vs. Universal Display Corp |
| IShares Physical vs. GreenX Metals | IShares Physical vs. JD Sports Fashion | IShares Physical vs. Capital Metals PLC | IShares Physical vs. Golden Metal Resources |
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 Stocks Directory module to find actively traded stocks across global markets.
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