Correlation Between Nordic Semiconductor and Lion One
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Lion One 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 Lion One 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 Lion One Metals, you can compare the effects of market volatilities on Nordic Semiconductor and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Lion One.
Diversification Opportunities for Nordic Semiconductor and Lion One
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nordic and Lion is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Lion One go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Lion One
Assuming the 90 days horizon Nordic Semiconductor ASA is expected to generate 0.47 times more return on investment than Lion One. However, Nordic Semiconductor ASA is 2.11 times less risky than Lion One. It trades about 0.03 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.18 per unit of risk. If you would invest 842.00 in Nordic Semiconductor ASA on September 17, 2024 and sell it today you would earn a total of 8.00 from holding Nordic Semiconductor ASA or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. Lion One Metals
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Lion One Metals |
Nordic Semiconductor and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Lion One
The main advantage of trading using opposite Nordic Semiconductor and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| Nordic Semiconductor vs. Taiwan Semiconductor Manufacturing | Nordic Semiconductor vs. Broadcom | Nordic Semiconductor vs. Superior Plus Corp | Nordic Semiconductor vs. SIVERS SEMICONDUCTORS AB |
| Lion One vs. Franco Nevada | Lion One vs. Superior Plus Corp | Lion One vs. SIVERS SEMICONDUCTORS AB | Lion One vs. Norsk Hydro ASA |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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