Correlation Between Nordic Semiconductor and CDL INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and CDL INVESTMENT 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 CDL INVESTMENT 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 CDL INVESTMENT, you can compare the effects of market volatilities on Nordic Semiconductor and CDL INVESTMENT 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 CDL INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and CDL INVESTMENT.
Diversification Opportunities for Nordic Semiconductor and CDL INVESTMENT
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and CDL is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and CDL INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDL INVESTMENT 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 CDL INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDL INVESTMENT has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and CDL INVESTMENT go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and CDL INVESTMENT
Assuming the 90 days horizon Nordic Semiconductor ASA is expected to under-perform the CDL INVESTMENT. In addition to that, Nordic Semiconductor is 1.72 times more volatile than CDL INVESTMENT. It trades about -0.05 of its total potential returns per unit of risk. CDL INVESTMENT is currently generating about -0.02 per unit of volatility. If you would invest 44.00 in CDL INVESTMENT on October 18, 2024 and sell it today you would lose (2.00) from holding CDL INVESTMENT or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. CDL INVESTMENT
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| CDL INVESTMENT |
Nordic Semiconductor and CDL INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and CDL INVESTMENT
The main advantage of trading using opposite Nordic Semiconductor and CDL INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, CDL INVESTMENT 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 CDL INVESTMENT will offset losses from the drop in CDL INVESTMENT's long position.| Nordic Semiconductor vs. GALENA MINING LTD | Nordic Semiconductor vs. Endeavour Mining PLC | Nordic Semiconductor vs. MCEWEN MINING INC | Nordic Semiconductor vs. Hemisphere Energy Corp |
| CDL INVESTMENT vs. Meta Financial Group | CDL INVESTMENT vs. Taiwan Semiconductor Manufacturing | CDL INVESTMENT vs. Hua Hong Semiconductor | CDL INVESTMENT vs. PNC Financial Services |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |