Correlation Between Hua Hong and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Hua Hong 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 Hua Hong and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hua Hong Semiconductor and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Hua Hong 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 Hua Hong with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Hong and Nordic Semiconductor.
Diversification Opportunities for Hua Hong and Nordic Semiconductor
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hua and Nordic is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor 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 Hua Hong 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 Hua Hong Semiconductor 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 Hua Hong i.e., Hua Hong and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Hua Hong and Nordic Semiconductor
Assuming the 90 days horizon Hua Hong Semiconductor is expected to generate 0.99 times more return on investment than Nordic Semiconductor. However, Hua Hong Semiconductor is 1.01 times less risky than Nordic Semiconductor. It trades about 0.01 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about -0.01 per unit of risk. If you would invest 338.00 in Hua Hong Semiconductor on October 20, 2024 and sell it today you would lose (62.00) from holding Hua Hong Semiconductor or give up 18.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Hong Semiconductor vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Hua Hong Semiconductor |
| Nordic Semiconductor ASA |
Hua Hong and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Hong and Nordic Semiconductor
The main advantage of trading using opposite Hua Hong and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Hong 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.| Hua Hong vs. Wayside Technology Group | Hua Hong vs. MACOM Technology Solutions | Hua Hong vs. FANDIFI TECHNOLOGY P | Hua Hong vs. PACIFIC ONLINE |
| Nordic Semiconductor vs. TIANDE CHEMICAL | Nordic Semiconductor vs. KINGBOARD CHEMICAL | Nordic Semiconductor vs. Siamgas And Petrochemicals | Nordic Semiconductor vs. Mitsubishi Gas Chemical |
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 CEOs Directory module to screen CEOs from public companies around the world.
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