Correlation Between Nordic Semiconductor and ELMOS SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on Nordic Semiconductor and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and ELMOS SEMICONDUCTOR.
Diversification Opportunities for Nordic Semiconductor and ELMOS SEMICONDUCTOR
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nordic and ELMOS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELMOS SEMICONDUCTOR has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and ELMOS SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and ELMOS SEMICONDUCTOR
Assuming the 90 days horizon Nordic Semiconductor ASA is expected to under-perform the ELMOS SEMICONDUCTOR. In addition to that, Nordic Semiconductor is 1.29 times more volatile than ELMOS SEMICONDUCTOR. It trades about 0.0 of its total potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about 0.02 per unit of volatility. If you would invest 6,660 in ELMOS SEMICONDUCTOR on November 5, 2024 and sell it today you would earn a total of 350.00 from holding ELMOS SEMICONDUCTOR or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. ELMOS SEMICONDUCTOR
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| ELMOS SEMICONDUCTOR |
Nordic Semiconductor and ELMOS SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and ELMOS SEMICONDUCTOR
The main advantage of trading using opposite Nordic Semiconductor and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR will offset losses from the drop in ELMOS SEMICONDUCTOR's long position.| Nordic Semiconductor vs. EEDUCATION ALBERT AB | Nordic Semiconductor vs. SQUIRREL MEDIA SA | Nordic Semiconductor vs. Melco Resorts Entertainment | Nordic Semiconductor vs. Nexstar Media Group |
| ELMOS SEMICONDUCTOR vs. TRADELINK ELECTRON | ELMOS SEMICONDUCTOR vs. The Trade Desk | ELMOS SEMICONDUCTOR vs. ecotel communication ag | ELMOS SEMICONDUCTOR vs. CRISPR Therapeutics AG |
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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