Correlation Between Dolphin Drilling and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Dolphin Drilling 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 Dolphin Drilling and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dolphin Drilling AS and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Dolphin Drilling 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 Dolphin Drilling with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolphin Drilling and Nordic Semiconductor.
Diversification Opportunities for Dolphin Drilling and Nordic Semiconductor
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dolphin and Nordic is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Drilling AS 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 Dolphin Drilling 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 Dolphin Drilling AS 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 Dolphin Drilling i.e., Dolphin Drilling and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Dolphin Drilling and Nordic Semiconductor
Assuming the 90 days trading horizon Dolphin Drilling AS is expected to under-perform the Nordic Semiconductor. In addition to that, Dolphin Drilling is 1.94 times more volatile than Nordic Semiconductor ASA. It trades about -0.18 of its total potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about -0.23 per unit of volatility. If you would invest 10,870 in Nordic Semiconductor ASA on September 1, 2024 and sell it today you would lose (976.00) from holding Nordic Semiconductor ASA or give up 8.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dolphin Drilling AS vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Dolphin Drilling |
| Nordic Semiconductor ASA |
Dolphin Drilling and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dolphin Drilling and Nordic Semiconductor
The main advantage of trading using opposite Dolphin Drilling and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Drilling 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.| Dolphin Drilling vs. Shelf Drilling | Dolphin Drilling vs. BW Offshore | Dolphin Drilling vs. Subsea 7 SA | Dolphin Drilling vs. Elkem ASA |
| 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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