Correlation Between Nordic Semiconductor and NVIDIA
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and NVIDIA 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 NVIDIA 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 NVIDIA, you can compare the effects of market volatilities on Nordic Semiconductor and NVIDIA 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 NVIDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and NVIDIA.
Diversification Opportunities for Nordic Semiconductor and NVIDIA
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nordic and NVIDIA is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and NVIDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA 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 NVIDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and NVIDIA go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and NVIDIA
Assuming the 90 days horizon Nordic Semiconductor ASA is expected to generate 1.02 times more return on investment than NVIDIA. However, Nordic Semiconductor is 1.02 times more volatile than NVIDIA. It trades about 0.23 of its potential returns per unit of risk. NVIDIA is currently generating about -0.04 per unit of risk. If you would invest 853.00 in Nordic Semiconductor ASA on November 30, 2024 and sell it today you would earn a total of 396.00 from holding Nordic Semiconductor ASA or generate 46.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. NVIDIA
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| NVIDIA |
Nordic Semiconductor and NVIDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and NVIDIA
The main advantage of trading using opposite Nordic Semiconductor and NVIDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, NVIDIA 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 NVIDIA will offset losses from the drop in NVIDIA's long position.| Nordic Semiconductor vs. DETALION GAMES SA | Nordic Semiconductor vs. Corsair Gaming | Nordic Semiconductor vs. MOVIE GAMES SA | Nordic Semiconductor vs. Investment AB Latour |
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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