Correlation Between Aker Horizons and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Aker Horizons 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 Aker Horizons and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aker Horizons AS and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Aker Horizons 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 Aker Horizons with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Horizons and Nordic Semiconductor.
Diversification Opportunities for Aker Horizons and Nordic Semiconductor
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aker and Nordic is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aker Horizons AS 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 Aker Horizons 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 Aker Horizons AS 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 Aker Horizons i.e., Aker Horizons and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Aker Horizons and Nordic Semiconductor
Assuming the 90 days trading horizon Aker Horizons AS is expected to under-perform the Nordic Semiconductor. In addition to that, Aker Horizons is 2.45 times more volatile than Nordic Semiconductor ASA. It trades about -0.34 of its total potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about -0.13 per unit of volatility. If you would invest 10,260 in Nordic Semiconductor ASA on August 25, 2024 and sell it today you would lose (660.00) from holding Nordic Semiconductor ASA or give up 6.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aker Horizons AS vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Aker Horizons AS |
| Nordic Semiconductor ASA |
Aker Horizons and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker Horizons and Nordic Semiconductor
The main advantage of trading using opposite Aker Horizons and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker Horizons 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.| Aker Horizons vs. Aker Carbon Capture | Aker Horizons vs. REC Silicon ASA | Aker Horizons vs. Aker Solutions ASA | Aker Horizons vs. Aker BP ASA |
| Nordic Semiconductor vs. Storebrand ASA | Nordic Semiconductor vs. DnB ASA | Nordic Semiconductor vs. Telenor ASA | Nordic Semiconductor vs. Kongsberg Gruppen ASA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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