Correlation Between Nordic Semiconductor and Cisco Systems
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Cisco Systems 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 Cisco Systems 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 Cisco Systems, you can compare the effects of market volatilities on Nordic Semiconductor and Cisco Systems 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 Cisco Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Cisco Systems.
Diversification Opportunities for Nordic Semiconductor and Cisco Systems
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nordic and Cisco is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems 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 Cisco Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cisco Systems has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Cisco Systems go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Cisco Systems
Assuming the 90 days horizon Nordic Semiconductor ASA is expected to under-perform the Cisco Systems. In addition to that, Nordic Semiconductor is 1.71 times more volatile than Cisco Systems. It trades about -0.14 of its total potential returns per unit of risk. Cisco Systems is currently generating about 0.4 per unit of volatility. If you would invest 5,110 in Cisco Systems on September 4, 2024 and sell it today you would earn a total of 568.00 from holding Cisco Systems or generate 11.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. Cisco Systems
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Cisco Systems |
Nordic Semiconductor and Cisco Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Cisco Systems
The main advantage of trading using opposite Nordic Semiconductor and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Cisco Systems 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 Cisco Systems will offset losses from the drop in Cisco Systems' long position.| Nordic Semiconductor vs. ePlay Digital | Nordic Semiconductor vs. PLAYTIKA HOLDING DL 01 | Nordic Semiconductor vs. Playa Hotels Resorts | Nordic Semiconductor vs. JAPAN AIRLINES |
| Cisco Systems vs. ASURE SOFTWARE | Cisco Systems vs. Nordic Semiconductor ASA | Cisco Systems vs. USU Software AG | Cisco Systems vs. Take Two Interactive Software |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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