Correlation Between Hochschild Mining and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Hochschild 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 Hochschild 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 Hochschild Mining plc and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Hochschild 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 Hochschild Mining with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hochschild Mining and Nordic Semiconductor.
Diversification Opportunities for Hochschild Mining and Nordic Semiconductor
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hochschild and Nordic is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hochschild Mining plc 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 Hochschild 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 Hochschild Mining plc 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 Hochschild Mining i.e., Hochschild Mining and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Hochschild Mining and Nordic Semiconductor
Assuming the 90 days horizon Hochschild Mining plc is expected to under-perform the Nordic Semiconductor. In addition to that, Hochschild Mining is 1.55 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 0.11 per unit of volatility. If you would invest 858.00 in Nordic Semiconductor ASA on October 10, 2024 and sell it today you would earn a total of 29.00 from holding Nordic Semiconductor ASA or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Hochschild Mining plc vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Hochschild Mining plc |
| Nordic Semiconductor ASA |
Hochschild Mining and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hochschild Mining and Nordic Semiconductor
The main advantage of trading using opposite Hochschild Mining and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hochschild 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.| Hochschild Mining vs. NORTHEAST UTILITIES | Hochschild Mining vs. AWILCO DRILLING PLC | Hochschild Mining vs. Addtech AB | Hochschild Mining vs. Sunny Optical Technology |
| Nordic Semiconductor vs. HANOVER INSURANCE | Nordic Semiconductor vs. Ribbon Communications | Nordic Semiconductor vs. Reinsurance Group of | Nordic Semiconductor vs. Shenandoah Telecommunications |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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