Correlation Between VIVA WINE and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both VIVA WINE 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 VIVA WINE and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIVA WINE GROUP and Nordic Semiconductor ASA, you can compare the effects of market volatilities on VIVA WINE 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 VIVA WINE with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and Nordic Semiconductor.
Diversification Opportunities for VIVA WINE and Nordic Semiconductor
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between VIVA and Nordic is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP 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 VIVA WINE 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 VIVA WINE GROUP 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 VIVA WINE i.e., VIVA WINE and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between VIVA WINE and Nordic Semiconductor
Assuming the 90 days horizon VIVA WINE GROUP is expected to generate 1.36 times more return on investment than Nordic Semiconductor. However, VIVA WINE is 1.36 times more volatile than Nordic Semiconductor ASA. It trades about 0.06 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about 0.02 per unit of risk. If you would invest 112.00 in VIVA WINE GROUP on November 27, 2024 and sell it today you would earn a total of 243.00 from holding VIVA WINE GROUP or generate 216.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIVA WINE GROUP vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| VIVA WINE GROUP |
| Nordic Semiconductor ASA |
VIVA WINE and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIVA WINE and Nordic Semiconductor
The main advantage of trading using opposite VIVA WINE and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE 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.| VIVA WINE vs. Yanzhou Coal Mining | VIVA WINE vs. BioNTech SE | VIVA WINE vs. Allegheny Technologies Incorporated | VIVA WINE vs. Globex Mining Enterprises |
| Nordic Semiconductor vs. PennyMac Mortgage Investment | Nordic Semiconductor vs. LIFENET INSURANCE CO | Nordic Semiconductor vs. New Residential Investment | Nordic Semiconductor vs. Ping An Insurance |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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