Correlation Between Nordic Semiconductor and Mercantile Investment
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Mercantile Investment 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 Mercantile Investment 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 The Mercantile Investment, you can compare the effects of market volatilities on Nordic Semiconductor and Mercantile Investment 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 Mercantile Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Mercantile Investment.
Diversification Opportunities for Nordic Semiconductor and Mercantile Investment
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nordic and Mercantile is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and The Mercantile Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Mercantile Investment 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 Mercantile Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Mercantile Investment has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Mercantile Investment go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Mercantile Investment
Assuming the 90 days trading horizon Nordic Semiconductor is expected to generate 3.54 times less return on investment than Mercantile Investment. In addition to that, Nordic Semiconductor is 3.56 times more volatile than The Mercantile Investment. It trades about 0.0 of its total potential returns per unit of risk. The Mercantile Investment is currently generating about 0.06 per unit of volatility. If you would invest 20,442 in The Mercantile Investment on September 4, 2024 and sell it today you would earn a total of 3,258 from holding The Mercantile Investment or generate 15.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. The Mercantile Investment
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| The Mercantile Investment |
Nordic Semiconductor and Mercantile Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Mercantile Investment
The main advantage of trading using opposite Nordic Semiconductor and Mercantile Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Mercantile Investment 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 Mercantile Investment will offset losses from the drop in Mercantile Investment's long position.| Nordic Semiconductor vs. Wyndham Hotels Resorts | Nordic Semiconductor vs. BW Offshore | Nordic Semiconductor vs. Gear4music Plc | Nordic Semiconductor vs. Morgan Advanced Materials |
| Mercantile Investment vs. Sovereign Metals | Mercantile Investment vs. Iron Mountain | Mercantile Investment vs. European Metals Holdings | Mercantile Investment vs. Veolia Environnement VE |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |