Correlation Between Nordic Semiconductor and China Datang
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and China Datang 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 China Datang 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 China Datang, you can compare the effects of market volatilities on Nordic Semiconductor and China Datang 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 China Datang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and China Datang.
Diversification Opportunities for Nordic Semiconductor and China Datang
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nordic and China is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and China Datang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Datang 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 China Datang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Datang has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and China Datang go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and China Datang
Assuming the 90 days horizon Nordic Semiconductor ASA is expected to generate 0.78 times more return on investment than China Datang. However, Nordic Semiconductor ASA is 1.28 times less risky than China Datang. It trades about 0.3 of its potential returns per unit of risk. China Datang is currently generating about 0.11 per unit of risk. If you would invest 843.00 in Nordic Semiconductor ASA on October 30, 2024 and sell it today you would earn a total of 168.00 from holding Nordic Semiconductor ASA or generate 19.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. China Datang
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| China Datang |
Nordic Semiconductor and China Datang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and China Datang
The main advantage of trading using opposite Nordic Semiconductor and China Datang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, China Datang 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 China Datang will offset losses from the drop in China Datang's long position.| Nordic Semiconductor vs. SIEM OFFSHORE NEW | Nordic Semiconductor vs. GEELY AUTOMOBILE | Nordic Semiconductor vs. SOLSTAD OFFSHORE NK | Nordic Semiconductor vs. Wayside Technology Group |
| China Datang vs. Broadridge Financial Solutions | China Datang vs. COPLAND ROAD CAPITAL | China Datang vs. CanSino Biologics | China Datang vs. SAN MIGUEL BREWERY |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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