Correlation Between Nordic Semiconductor and Nanjing Panda
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Nanjing Panda 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 Nanjing Panda 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 Nanjing Panda Electronics, you can compare the effects of market volatilities on Nordic Semiconductor and Nanjing Panda 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 Nanjing Panda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Nanjing Panda.
Diversification Opportunities for Nordic Semiconductor and Nanjing Panda
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nordic and Nanjing is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Nanjing Panda Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Panda Electronics 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 Nanjing Panda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Panda Electronics has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Nanjing Panda go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Nanjing Panda
If you would invest 853.00 in Nordic Semiconductor ASA on October 29, 2024 and sell it today you would earn a total of 158.00 from holding Nordic Semiconductor ASA or generate 18.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. Nanjing Panda Electronics
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Nanjing Panda Electronics |
Nordic Semiconductor and Nanjing Panda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Nanjing Panda
The main advantage of trading using opposite Nordic Semiconductor and Nanjing Panda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Nanjing Panda 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 Nanjing Panda will offset losses from the drop in Nanjing Panda's long position.| Nordic Semiconductor vs. SIEM OFFSHORE NEW | Nordic Semiconductor vs. SBM OFFSHORE | Nordic Semiconductor vs. SOLSTAD OFFSHORE NK | Nordic Semiconductor vs. UNITED RENTALS |
| Nanjing Panda vs. MCEWEN MINING INC | Nanjing Panda vs. Nordic Semiconductor ASA | Nanjing Panda vs. UNIVERSAL MUSIC GROUP | Nanjing Panda vs. CHINA TONTINE WINES |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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