Correlation Between CDL INVESTMENT and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both CDL INVESTMENT 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 CDL INVESTMENT and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDL INVESTMENT and Nordic Semiconductor ASA, you can compare the effects of market volatilities on CDL INVESTMENT 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 CDL INVESTMENT with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDL INVESTMENT and Nordic Semiconductor.
Diversification Opportunities for CDL INVESTMENT and Nordic Semiconductor
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CDL and Nordic is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding CDL INVESTMENT 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 CDL INVESTMENT 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 CDL INVESTMENT 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 CDL INVESTMENT i.e., CDL INVESTMENT and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between CDL INVESTMENT and Nordic Semiconductor
Assuming the 90 days trading horizon CDL INVESTMENT is expected to generate 0.61 times more return on investment than Nordic Semiconductor. However, CDL INVESTMENT is 1.63 times less risky than Nordic Semiconductor. It trades about 0.02 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about -0.01 per unit of risk. If you would invest 37.00 in CDL INVESTMENT on October 18, 2024 and sell it today you would earn a total of 5.00 from holding CDL INVESTMENT or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDL INVESTMENT vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| CDL INVESTMENT |
| Nordic Semiconductor ASA |
CDL INVESTMENT and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDL INVESTMENT and Nordic Semiconductor
The main advantage of trading using opposite CDL INVESTMENT and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDL INVESTMENT 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.| CDL INVESTMENT vs. Meta Financial Group | CDL INVESTMENT vs. Taiwan Semiconductor Manufacturing | CDL INVESTMENT vs. Hua Hong Semiconductor | CDL INVESTMENT vs. PNC Financial Services |
| Nordic Semiconductor vs. GALENA MINING LTD | Nordic Semiconductor vs. Endeavour Mining PLC | Nordic Semiconductor vs. MCEWEN MINING INC | Nordic Semiconductor vs. Hemisphere Energy Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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