Correlation Between SMA Solar and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both SMA Solar and Nordic Semiconductor 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 SMA Solar and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMA Solar Technology and Nordic Semiconductor ASA, you can compare the effects of market volatilities on SMA Solar and Nordic Semiconductor 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 SMA Solar with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMA Solar and Nordic Semiconductor.
Diversification Opportunities for SMA Solar and Nordic Semiconductor
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SMA and Nordic is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SMA Solar Technology and Nordic Semiconductor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Semiconductor ASA and SMA Solar 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 SMA Solar Technology are associated (or correlated) with Nordic Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Semiconductor ASA has no effect on the direction of SMA Solar i.e., SMA Solar and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between SMA Solar and Nordic Semiconductor
Assuming the 90 days trading horizon SMA Solar Technology is expected to under-perform the Nordic Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, SMA Solar Technology is 1.01 times less risky than Nordic Semiconductor. The stock trades about -0.1 of its potential returns per unit of risk. The Nordic Semiconductor ASA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 12,831 in Nordic Semiconductor ASA on October 16, 2024 and sell it today you would lose (1,741) from holding Nordic Semiconductor ASA or give up 13.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMA Solar Technology vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| SMA Solar Technology |
| Nordic Semiconductor ASA |
SMA Solar and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMA Solar and Nordic Semiconductor
The main advantage of trading using opposite SMA Solar and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMA Solar position performs unexpectedly, Nordic Semiconductor 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 Nordic Semiconductor will offset losses from the drop in Nordic Semiconductor's long position.| SMA Solar vs. Panther Metals PLC | SMA Solar vs. European Metals Holdings | SMA Solar vs. Gaztransport et Technigaz | SMA Solar vs. Europa Metals |
| Nordic Semiconductor vs. DXC Technology Co | Nordic Semiconductor vs. Aptitude Software Group | Nordic Semiconductor vs. Vitec Software Group | Nordic Semiconductor vs. SMA Solar Technology |
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.
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 | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |