Correlation Between Strategic Investments and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Strategic Investments 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 Strategic Investments and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Strategic Investments 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 Strategic Investments with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and Nordic Semiconductor.
Diversification Opportunities for Strategic Investments and Nordic Semiconductor
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Strategic and Nordic is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments 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 Strategic Investments 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 Strategic Investments 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 Strategic Investments i.e., Strategic Investments and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Strategic Investments and Nordic Semiconductor
Assuming the 90 days horizon Strategic Investments AS is expected to generate 1.53 times more return on investment than Nordic Semiconductor. However, Strategic Investments is 1.53 times more volatile than Nordic Semiconductor ASA. It trades about 0.02 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about -0.21 per unit of risk. If you would invest 14.00 in Strategic Investments AS on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Strategic Investments AS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Investments AS vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Strategic Investments |
| Nordic Semiconductor ASA |
Strategic Investments and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and Nordic Semiconductor
The main advantage of trading using opposite Strategic Investments and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments 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.| Strategic Investments vs. CHINA TONTINE WINES | Strategic Investments vs. VIRGIN WINES UK | Strategic Investments vs. American Homes 4 | Strategic Investments vs. Treasury Wine Estates |
| Nordic Semiconductor vs. NVIDIA | Nordic Semiconductor vs. Taiwan Semiconductor Manufacturing | Nordic Semiconductor vs. Intel |
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.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |