Correlation Between GALENA MINING and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both GALENA MINING 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 GALENA MINING and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GALENA MINING LTD and Nordic Semiconductor ASA, you can compare the effects of market volatilities on GALENA MINING 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 GALENA MINING with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of GALENA MINING and Nordic Semiconductor.
Diversification Opportunities for GALENA MINING and Nordic Semiconductor
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GALENA and Nordic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GALENA MINING LTD 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 GALENA MINING 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 GALENA MINING LTD 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 GALENA MINING i.e., GALENA MINING and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between GALENA MINING and Nordic Semiconductor
Assuming the 90 days horizon GALENA MINING LTD is expected to under-perform the Nordic Semiconductor. In addition to that, GALENA MINING is 1.7 times more volatile than Nordic Semiconductor ASA. It trades about -0.01 of its total potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about 0.01 per unit of volatility. If you would invest 1,397 in Nordic Semiconductor ASA on December 13, 2024 and sell it today you would lose (264.00) from holding Nordic Semiconductor ASA or give up 18.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
GALENA MINING LTD vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| GALENA MINING LTD |
| Nordic Semiconductor ASA |
GALENA MINING and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GALENA MINING and Nordic Semiconductor
The main advantage of trading using opposite GALENA MINING and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GALENA MINING 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.| GALENA MINING vs. BRIT AMER TOBACCO | ||
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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