Correlation Between Strategic Investments and NXP Semiconductors
Can any of the company-specific risk be diversified away by investing in both Strategic Investments and NXP Semiconductors 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 NXP Semiconductors 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 NXP Semiconductors NV, you can compare the effects of market volatilities on Strategic Investments and NXP Semiconductors 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 NXP Semiconductors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and NXP Semiconductors.
Diversification Opportunities for Strategic Investments and NXP Semiconductors
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Strategic and NXP is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and NXP Semiconductors NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXP Semiconductors 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 NXP Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXP Semiconductors has no effect on the direction of Strategic Investments i.e., Strategic Investments and NXP Semiconductors go up and down completely randomly.
Pair Corralation between Strategic Investments and NXP Semiconductors
Assuming the 90 days horizon Strategic Investments AS is expected to generate 1.68 times more return on investment than NXP Semiconductors. However, Strategic Investments is 1.68 times more volatile than NXP Semiconductors NV. It trades about 0.02 of its potential returns per unit of risk. NXP Semiconductors NV is currently generating about 0.02 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. NXP Semiconductors NV
Performance |
| Timeline |
| Strategic Investments |
| NXP Semiconductors |
Strategic Investments and NXP Semiconductors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and NXP Semiconductors
The main advantage of trading using opposite Strategic Investments and NXP Semiconductors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments position performs unexpectedly, NXP Semiconductors 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 NXP Semiconductors will offset losses from the drop in NXP Semiconductors' 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 |
| NXP Semiconductors vs. ONWARD MEDICAL BV | NXP Semiconductors vs. British American Tobacco | NXP Semiconductors vs. NetSol Technologies | NXP Semiconductors vs. Uber Technologies |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |