Correlation Between Apple and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Nordic Semiconductor.
Diversification Opportunities for Apple and Nordic Semiconductor
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and Nordic is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc 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 Apple 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 Apple Inc 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 Apple i.e., Apple and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Apple and Nordic Semiconductor
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.37 times more return on investment than Nordic Semiconductor. However, Apple Inc is 2.73 times less risky than Nordic Semiconductor. It trades about 0.06 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about 0.0 per unit of risk. If you would invest 16,395 in Apple Inc on August 31, 2024 and sell it today you would earn a total of 6,000 from holding Apple Inc or generate 36.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Apple Inc vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Apple Inc |
| Nordic Semiconductor ASA |
Apple and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Nordic Semiconductor
The main advantage of trading using opposite Apple and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. Datang International Power | Apple vs. DATAGROUP SE | Apple vs. INFORMATION SVC GRP | Apple vs. Consolidated Communications Holdings |
| Nordic Semiconductor vs. NVIDIA | Nordic Semiconductor vs. Taiwan Semiconductor Manufacturing | Nordic Semiconductor vs. Intel |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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