Correlation Between Nordic Semiconductor and HomeToGo
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and HomeToGo 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 HomeToGo 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 HomeToGo SE, you can compare the effects of market volatilities on Nordic Semiconductor and HomeToGo 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 HomeToGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and HomeToGo.
Diversification Opportunities for Nordic Semiconductor and HomeToGo
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and HomeToGo is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and HomeToGo SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeToGo SE 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 HomeToGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeToGo SE has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and HomeToGo go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and HomeToGo
Assuming the 90 days horizon Nordic Semiconductor ASA is expected to under-perform the HomeToGo. But the stock apears to be less risky and, when comparing its historical volatility, Nordic Semiconductor ASA is 1.35 times less risky than HomeToGo. The stock trades about -0.28 of its potential returns per unit of risk. The HomeToGo SE is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 230.00 in HomeToGo SE on August 29, 2024 and sell it today you would lose (20.00) from holding HomeToGo SE or give up 8.7% 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. HomeToGo SE
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| HomeToGo SE |
Nordic Semiconductor and HomeToGo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and HomeToGo
The main advantage of trading using opposite Nordic Semiconductor and HomeToGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, HomeToGo 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 HomeToGo will offset losses from the drop in HomeToGo's long position.| Nordic Semiconductor vs. Siamgas And Petrochemicals | Nordic Semiconductor vs. TYSON FOODS A | Nordic Semiconductor vs. JJ SNACK FOODS | Nordic Semiconductor vs. ADRIATIC METALS LS 013355 |
| HomeToGo vs. Ryanair Holdings plc | HomeToGo vs. SYSTEMAIR AB | HomeToGo vs. Harmony Gold Mining | HomeToGo vs. Westinghouse Air Brake |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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