Correlation Between Endeavour Mining and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Endeavour Mining 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 Endeavour Mining and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Endeavour Mining PLC and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Endeavour Mining 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 Endeavour Mining with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and Nordic Semiconductor.
Diversification Opportunities for Endeavour Mining and Nordic Semiconductor
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Endeavour and Nordic is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining PLC 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 Endeavour Mining 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 Endeavour Mining PLC 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 Endeavour Mining i.e., Endeavour Mining and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Endeavour Mining and Nordic Semiconductor
Assuming the 90 days trading horizon Endeavour Mining PLC is expected to under-perform the Nordic Semiconductor. In addition to that, Endeavour Mining is 1.44 times more volatile than Nordic Semiconductor ASA. It trades about -0.06 of its total potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about 0.3 per unit of volatility. If you would invest 848.00 in Nordic Semiconductor ASA on October 17, 2024 and sell it today you would earn a total of 76.00 from holding Nordic Semiconductor ASA or generate 8.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Endeavour Mining PLC vs. Nordic Semiconductor ASA
Performance |
Timeline |
Endeavour Mining PLC |
Nordic Semiconductor ASA |
Endeavour Mining and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Endeavour Mining and Nordic Semiconductor
The main advantage of trading using opposite Endeavour Mining and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining 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.Endeavour Mining vs. Apple Inc | Endeavour Mining vs. Apple Inc | Endeavour Mining vs. Apple Inc | Endeavour Mining vs. Apple Inc |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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