Correlation Between Grong Sparebank and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Grong Sparebank 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 Grong Sparebank and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grong Sparebank and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Grong Sparebank 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 Grong Sparebank with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grong Sparebank and Nordic Semiconductor.
Diversification Opportunities for Grong Sparebank and Nordic Semiconductor
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Grong and Nordic is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Grong Sparebank 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 Grong Sparebank 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 Grong Sparebank 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 Grong Sparebank i.e., Grong Sparebank and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Grong Sparebank and Nordic Semiconductor
Assuming the 90 days trading horizon Grong Sparebank is expected to generate 0.3 times more return on investment than Nordic Semiconductor. However, Grong Sparebank is 3.38 times less risky than Nordic Semiconductor. It trades about 0.01 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about -0.12 per unit of risk. If you would invest 14,900 in Grong Sparebank on September 2, 2024 and sell it today you would earn a total of 96.00 from holding Grong Sparebank or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grong Sparebank vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Grong Sparebank |
| Nordic Semiconductor ASA |
Grong Sparebank and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grong Sparebank and Nordic Semiconductor
The main advantage of trading using opposite Grong Sparebank and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grong Sparebank 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.| Grong Sparebank vs. Sparebank 1 SMN | Grong Sparebank vs. Sparebank 1 Nord Norge | Grong Sparebank vs. Sparebanken Vest | Grong Sparebank vs. Sparebank 1 Ostfold |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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