Correlation Between Nordic Semiconductor and SBM OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and SBM OFFSHORE 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 SBM OFFSHORE 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 SBM OFFSHORE, you can compare the effects of market volatilities on Nordic Semiconductor and SBM OFFSHORE 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 SBM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and SBM OFFSHORE.
Diversification Opportunities for Nordic Semiconductor and SBM OFFSHORE
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nordic and SBM is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and SBM OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM OFFSHORE 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 SBM OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM OFFSHORE has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and SBM OFFSHORE go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and SBM OFFSHORE
Assuming the 90 days horizon Nordic Semiconductor ASA is expected to generate 1.15 times more return on investment than SBM OFFSHORE. However, Nordic Semiconductor is 1.15 times more volatile than SBM OFFSHORE. It trades about 0.26 of its potential returns per unit of risk. SBM OFFSHORE is currently generating about 0.18 per unit of risk. If you would invest 871.00 in Nordic Semiconductor ASA on November 1, 2024 and sell it today you would earn a total of 92.00 from holding Nordic Semiconductor ASA or generate 10.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. SBM OFFSHORE
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| SBM OFFSHORE |
Nordic Semiconductor and SBM OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and SBM OFFSHORE
The main advantage of trading using opposite Nordic Semiconductor and SBM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, SBM OFFSHORE 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 SBM OFFSHORE will offset losses from the drop in SBM OFFSHORE's long position.| Nordic Semiconductor vs. WILLIS LEASE FIN | Nordic Semiconductor vs. LOANDEPOT INC A | Nordic Semiconductor vs. Global Ship Lease | Nordic Semiconductor vs. Air Lease |
| SBM OFFSHORE vs. Sunstone Hotel Investors | SBM OFFSHORE vs. VULCAN MATERIALS | SBM OFFSHORE vs. Eagle Materials | SBM OFFSHORE vs. INTERCONT HOTELS |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |