Correlation Between Nordic Semiconductor and Westgold Resources
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Westgold Resources 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 Nordic Semiconductor and Westgold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic Semiconductor ASA and Westgold Resources, you can compare the effects of market volatilities on Nordic Semiconductor and Westgold Resources 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 Nordic Semiconductor with a short position of Westgold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Westgold Resources.
Diversification Opportunities for Nordic Semiconductor and Westgold Resources
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordic and Westgold is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Westgold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westgold Resources and Nordic Semiconductor 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 Nordic Semiconductor ASA are associated (or correlated) with Westgold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westgold Resources has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Westgold Resources go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Westgold Resources
Assuming the 90 days horizon Nordic Semiconductor ASA is expected to generate 0.34 times more return on investment than Westgold Resources. However, Nordic Semiconductor ASA is 2.93 times less risky than Westgold Resources. It trades about 0.82 of its potential returns per unit of risk. Westgold Resources is currently generating about -0.02 per unit of risk. If you would invest 847.00 in Nordic Semiconductor ASA on October 26, 2024 and sell it today you would earn a total of 171.00 from holding Nordic Semiconductor ASA or generate 20.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. Westgold Resources
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Westgold Resources |
Nordic Semiconductor and Westgold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Westgold Resources
The main advantage of trading using opposite Nordic Semiconductor and Westgold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Westgold Resources 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 Westgold Resources will offset losses from the drop in Westgold Resources' long position.| Nordic Semiconductor vs. MagnaChip Semiconductor Corp | Nordic Semiconductor vs. The Boston Beer | Nordic Semiconductor vs. ON SEMICONDUCTOR | Nordic Semiconductor vs. ELMOS SEMICONDUCTOR |
| Westgold Resources vs. DISTRICT METALS | Westgold Resources vs. HK Electric Investments | Westgold Resources vs. SIERRA METALS | Westgold Resources vs. Fortescue Metals Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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