Correlation Between Nordic Semiconductor and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Perseus Mining 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 Perseus Mining 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 Perseus Mining Limited, you can compare the effects of market volatilities on Nordic Semiconductor and Perseus Mining 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 Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Perseus Mining.
Diversification Opportunities for Nordic Semiconductor and Perseus Mining
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nordic and Perseus is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining 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 Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Perseus Mining go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Perseus Mining
Assuming the 90 days horizon Nordic Semiconductor is expected to generate 3.75 times less return on investment than Perseus Mining. But when comparing it to its historical volatility, Nordic Semiconductor ASA is 1.24 times less risky than Perseus Mining. It trades about 0.03 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 157.00 in Perseus Mining Limited on September 17, 2024 and sell it today you would earn a total of 7.00 from holding Perseus Mining Limited or generate 4.46% 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. Perseus Mining Limited
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Perseus Mining |
Nordic Semiconductor and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Perseus Mining
The main advantage of trading using opposite Nordic Semiconductor and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Perseus Mining 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 Perseus Mining will offset losses from the drop in Perseus Mining'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 |
| Perseus Mining vs. Franco Nevada | Perseus Mining vs. Superior Plus Corp | Perseus Mining vs. SIVERS SEMICONDUCTORS AB | Perseus Mining 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |