Correlation Between Edita Food and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Edita Food 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 Edita Food and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edita Food Industries and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Edita Food 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 Edita Food with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edita Food and Nordic Semiconductor.
Diversification Opportunities for Edita Food and Nordic Semiconductor
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Edita and Nordic is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Edita Food Industries 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 Edita Food 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 Edita Food Industries 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 Edita Food i.e., Edita Food and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Edita Food and Nordic Semiconductor
If you would invest 10,372 in Nordic Semiconductor ASA on October 11, 2024 and sell it today you would earn a total of 268.00 from holding Nordic Semiconductor ASA or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edita Food Industries vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Edita Food Industries |
| Nordic Semiconductor ASA |
Edita Food and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edita Food and Nordic Semiconductor
The main advantage of trading using opposite Edita Food and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edita Food 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.| Edita Food vs. Air Products Chemicals | Edita Food vs. Vulcan Materials Co | Edita Food vs. STMicroelectronics NV | Edita Food vs. Batm Advanced Communications |
| Nordic Semiconductor vs. Cizzle Biotechnology Holdings | Nordic Semiconductor vs. Edita Food Industries | Nordic Semiconductor vs. Spotify Technology SA | Nordic Semiconductor vs. Alfa Financial Software |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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