Correlation Between Cass Information and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Cass Information 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 Cass Information and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cass Information Systems and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Cass Information 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 Cass Information with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and Nordic Semiconductor.
Diversification Opportunities for Cass Information and Nordic Semiconductor
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cass and Nordic is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems 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 Cass Information 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 Cass Information Systems 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 Cass Information i.e., Cass Information and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Cass Information and Nordic Semiconductor
Assuming the 90 days horizon Cass Information Systems is expected to generate 0.47 times more return on investment than Nordic Semiconductor. However, Cass Information Systems is 2.11 times less risky than Nordic Semiconductor. It trades about 0.11 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about -0.08 per unit of risk. If you would invest 3,673 in Cass Information Systems on September 12, 2024 and sell it today you would earn a total of 467.00 from holding Cass Information Systems or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cass Information Systems vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Cass Information Systems |
| Nordic Semiconductor ASA |
Cass Information and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and Nordic Semiconductor
The main advantage of trading using opposite Cass Information and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information 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.| Cass Information vs. Tradegate AG Wertpapierhandelsbank | Cass Information vs. Guidewire Software | Cass Information vs. PT Bank Maybank | Cass Information vs. REVO INSURANCE SPA |
| Nordic Semiconductor vs. Taiwan Semiconductor Manufacturing | Nordic Semiconductor vs. Broadcom | Nordic Semiconductor vs. Superior Plus Corp | Nordic Semiconductor vs. SIVERS SEMICONDUCTORS AB |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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