Correlation Between Nordic Semiconductor and BC IRON
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and BC IRON 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 BC IRON 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 BC IRON, you can compare the effects of market volatilities on Nordic Semiconductor and BC IRON 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 BC IRON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and BC IRON.
Diversification Opportunities for Nordic Semiconductor and BC IRON
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nordic and BC3 is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and BC IRON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BC IRON 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 BC IRON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BC IRON has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and BC IRON go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and BC IRON
Assuming the 90 days horizon Nordic Semiconductor is expected to generate 9.32 times less return on investment than BC IRON. In addition to that, Nordic Semiconductor is 1.11 times more volatile than BC IRON. It trades about 0.0 of its total potential returns per unit of risk. BC IRON is currently generating about 0.01 per unit of volatility. If you would invest 17.00 in BC IRON on October 16, 2024 and sell it today you would lose (1.00) from holding BC IRON or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. BC IRON
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| BC IRON |
Nordic Semiconductor and BC IRON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and BC IRON
The main advantage of trading using opposite Nordic Semiconductor and BC IRON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, BC IRON 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 BC IRON will offset losses from the drop in BC IRON's long position.| Nordic Semiconductor vs. Stag Industrial | Nordic Semiconductor vs. Japan Tobacco | Nordic Semiconductor vs. MCEWEN MINING INC | Nordic Semiconductor vs. Dairy Farm International |
| BC IRON vs. BW OFFSHORE LTD | BC IRON vs. Gold Road Resources | BC IRON vs. Texas Roadhouse | BC IRON vs. Broadridge Financial Solutions |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |