Correlation Between Ams AG and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Ams AG 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 Ams AG and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ams AG and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Ams AG 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 Ams AG with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ams AG and Nordic Semiconductor.
Diversification Opportunities for Ams AG and Nordic Semiconductor
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ams and Nordic is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ams AG 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 Ams AG 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 ams AG 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 Ams AG i.e., Ams AG and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Ams AG and Nordic Semiconductor
Assuming the 90 days horizon ams AG is expected to generate 57.61 times more return on investment than Nordic Semiconductor. However, Ams AG is 57.61 times more volatile than Nordic Semiconductor ASA. It trades about 0.29 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about 0.04 per unit of risk. If you would invest 406.00 in ams AG on September 1, 2024 and sell it today you would earn a total of 339.00 from holding ams AG or generate 83.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
ams AG vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| ams AG |
| Nordic Semiconductor ASA |
Ams AG and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ams AG and Nordic Semiconductor
The main advantage of trading using opposite Ams AG and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ams AG 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.| Ams AG vs. Guerrilla RF | Ams AG vs. Odyssey Semiconductor Technologies | Ams AG vs. Archer Materials Limited | Ams AG vs. Alphawave IP Group |
| Nordic Semiconductor vs. Power Integrations | Nordic Semiconductor vs. MACOM Technology Solutions | Nordic Semiconductor vs. Intchains Group Limited | Nordic Semiconductor vs. Vishay Intertechnology |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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