Correlation Between AutoStore Holdings and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both AutoStore Holdings 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 AutoStore Holdings and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AutoStore Holdings and Nordic Semiconductor ASA, you can compare the effects of market volatilities on AutoStore Holdings 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 AutoStore Holdings with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of AutoStore Holdings and Nordic Semiconductor.
Diversification Opportunities for AutoStore Holdings and Nordic Semiconductor
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AutoStore and Nordic is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding AutoStore Holdings 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 AutoStore Holdings 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 AutoStore Holdings 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 AutoStore Holdings i.e., AutoStore Holdings and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between AutoStore Holdings and Nordic Semiconductor
Assuming the 90 days trading horizon AutoStore Holdings is expected to generate 0.83 times more return on investment than Nordic Semiconductor. However, AutoStore Holdings is 1.2 times less risky than Nordic Semiconductor. It trades about 0.08 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about -0.12 per unit of risk. If you would invest 1,080 in AutoStore Holdings on August 31, 2024 and sell it today you would earn a total of 143.00 from holding AutoStore Holdings or generate 13.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AutoStore Holdings vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| AutoStore Holdings |
| Nordic Semiconductor ASA |
AutoStore Holdings and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AutoStore Holdings and Nordic Semiconductor
The main advantage of trading using opposite AutoStore Holdings and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AutoStore Holdings 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.| AutoStore Holdings vs. Nordic Semiconductor ASA | AutoStore Holdings vs. Aker BP ASA | AutoStore Holdings vs. SalMar ASA | AutoStore Holdings vs. Scatec Solar OL |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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