Correlation Between Nordic Semiconductor and Linde PLC
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Linde PLC 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 Linde PLC 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 Linde PLC, you can compare the effects of market volatilities on Nordic Semiconductor and Linde PLC 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 Linde PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Linde PLC.
Diversification Opportunities for Nordic Semiconductor and Linde PLC
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordic and Linde is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Linde PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linde PLC 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 Linde PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linde PLC has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Linde PLC go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Linde PLC
Assuming the 90 days horizon Nordic Semiconductor ASA is expected to under-perform the Linde PLC. In addition to that, Nordic Semiconductor is 2.37 times more volatile than Linde PLC. It trades about -0.14 of its total potential returns per unit of risk. Linde PLC is currently generating about 0.19 per unit of volatility. If you would invest 42,100 in Linde PLC on September 3, 2024 and sell it today you would earn a total of 1,440 from holding Linde PLC or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. Linde PLC
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Linde PLC |
Nordic Semiconductor and Linde PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Linde PLC
The main advantage of trading using opposite Nordic Semiconductor and Linde PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Linde PLC 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 Linde PLC will offset losses from the drop in Linde PLC's long position.| Nordic Semiconductor vs. NVIDIA | Nordic Semiconductor vs. Taiwan Semiconductor Manufacturing | Nordic Semiconductor vs. Advanced Micro Devices | Nordic Semiconductor vs. Intel |
| Linde PLC vs. The Sherwin Williams | Linde PLC vs. Dupont De Nemours | Linde PLC vs. Superior Plus Corp | Linde PLC vs. NMI Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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