Correlation Between Nordic Semiconductor and Imperial Metals
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Imperial Metals 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 Imperial Metals 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 Imperial Metals, you can compare the effects of market volatilities on Nordic Semiconductor and Imperial Metals 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 Imperial Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Imperial Metals.
Diversification Opportunities for Nordic Semiconductor and Imperial Metals
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and Imperial is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Imperial Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Metals 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 Imperial Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Metals has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Imperial Metals go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Imperial Metals
Assuming the 90 days horizon Nordic Semiconductor ASA is expected to generate 0.86 times more return on investment than Imperial Metals. However, Nordic Semiconductor ASA is 1.16 times less risky than Imperial Metals. It trades about 0.14 of its potential returns per unit of risk. Imperial Metals is currently generating about -0.07 per unit of risk. If you would invest 835.00 in Nordic Semiconductor ASA on September 13, 2024 and sell it today you would earn a total of 45.00 from holding Nordic Semiconductor ASA or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. Imperial Metals
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Imperial Metals |
Nordic Semiconductor and Imperial Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Imperial Metals
The main advantage of trading using opposite Nordic Semiconductor and Imperial Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Imperial Metals 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 Imperial Metals will offset losses from the drop in Imperial Metals' long position.| Nordic Semiconductor vs. Taiwan Semiconductor Manufacturing | Nordic Semiconductor vs. Broadcom | Nordic Semiconductor vs. Superior Plus Corp | Nordic Semiconductor vs. SIVERS SEMICONDUCTORS AB |
| Imperial Metals vs. Perma Fix Environmental Services | Imperial Metals vs. FUYO GENERAL LEASE | Imperial Metals vs. MOLSON RS BEVERAGE | Imperial Metals vs. Lifeway Foods |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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