Correlation Between Peijia Medical and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Peijia Medical 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 Peijia Medical and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peijia Medical Limited and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Peijia Medical 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 Peijia Medical with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peijia Medical and Nordic Semiconductor.
Diversification Opportunities for Peijia Medical and Nordic Semiconductor
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Peijia and Nordic is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Peijia Medical Limited 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 Peijia Medical 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 Peijia Medical Limited 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 Peijia Medical i.e., Peijia Medical and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Peijia Medical and Nordic Semiconductor
Assuming the 90 days horizon Peijia Medical Limited is expected to under-perform the Nordic Semiconductor. In addition to that, Peijia Medical is 2.3 times more volatile than Nordic Semiconductor ASA. It trades about -0.11 of its total potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about 0.82 per unit of volatility. If you would invest 847.00 in Nordic Semiconductor ASA on October 26, 2024 and sell it today you would earn a total of 171.00 from holding Nordic Semiconductor ASA or generate 20.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peijia Medical Limited vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Peijia Medical |
| Nordic Semiconductor ASA |
Peijia Medical and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peijia Medical and Nordic Semiconductor
The main advantage of trading using opposite Peijia Medical and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peijia Medical 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.| Peijia Medical vs. Lendlease Group | Peijia Medical vs. United Rentals | Peijia Medical vs. WILLIS LEASE FIN | Peijia Medical vs. Vishay Intertechnology |
| Nordic Semiconductor vs. MagnaChip Semiconductor Corp | Nordic Semiconductor vs. The Boston Beer | Nordic Semiconductor vs. ON SEMICONDUCTOR | Nordic Semiconductor vs. ELMOS SEMICONDUCTOR |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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