Correlation Between Albion Technology and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Albion Technology 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 Albion Technology and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albion Technology General and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Albion Technology 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 Albion Technology with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albion Technology and Nordic Semiconductor.
Diversification Opportunities for Albion Technology and Nordic Semiconductor
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Albion and Nordic is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General 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 Albion Technology 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 Albion Technology General 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 Albion Technology i.e., Albion Technology and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Albion Technology and Nordic Semiconductor
Assuming the 90 days trading horizon Albion Technology General is expected to generate 0.3 times more return on investment than Nordic Semiconductor. However, Albion Technology General is 3.31 times less risky than Nordic Semiconductor. It trades about 0.04 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about -0.06 per unit of risk. If you would invest 6,543 in Albion Technology General on September 1, 2024 and sell it today you would earn a total of 307.00 from holding Albion Technology General or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albion Technology General vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Albion Technology General |
| Nordic Semiconductor ASA |
Albion Technology and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albion Technology and Nordic Semiconductor
The main advantage of trading using opposite Albion Technology and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Technology 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.| Albion Technology vs. Samsung Electronics Co | Albion Technology vs. Samsung Electronics Co | Albion Technology vs. Toyota Motor Corp | Albion Technology vs. Reliance Industries Ltd |
| Nordic Semiconductor vs. Diversified Energy | Nordic Semiconductor vs. Zegona Communications Plc | Nordic Semiconductor vs. Gamma Communications PLC | Nordic Semiconductor vs. TR Property Investment |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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