Correlation Between Nordic Semiconductor and QUALCOMM Incorporated
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and QUALCOMM Incorporated 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 QUALCOMM Incorporated 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 QUALCOMM Incorporated, you can compare the effects of market volatilities on Nordic Semiconductor and QUALCOMM Incorporated 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 QUALCOMM Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and QUALCOMM Incorporated.
Diversification Opportunities for Nordic Semiconductor and QUALCOMM Incorporated
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordic and QUALCOMM is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and QUALCOMM Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUALCOMM Incorporated 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 QUALCOMM Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUALCOMM Incorporated has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and QUALCOMM Incorporated go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and QUALCOMM Incorporated
Assuming the 90 days horizon Nordic Semiconductor ASA is expected to under-perform the QUALCOMM Incorporated. In addition to that, Nordic Semiconductor is 1.43 times more volatile than QUALCOMM Incorporated. It trades about -0.06 of its total potential returns per unit of risk. QUALCOMM Incorporated is currently generating about -0.06 per unit of volatility. If you would invest 18,818 in QUALCOMM Incorporated on August 28, 2024 and sell it today you would lose (3,852) from holding QUALCOMM Incorporated or give up 20.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. QUALCOMM Incorporated
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| QUALCOMM Incorporated |
Nordic Semiconductor and QUALCOMM Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and QUALCOMM Incorporated
The main advantage of trading using opposite Nordic Semiconductor and QUALCOMM Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, QUALCOMM Incorporated 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 QUALCOMM Incorporated will offset losses from the drop in QUALCOMM Incorporated's long position.| Nordic Semiconductor vs. Siamgas And Petrochemicals | Nordic Semiconductor vs. TYSON FOODS A | Nordic Semiconductor vs. JJ SNACK FOODS | Nordic Semiconductor vs. ADRIATIC METALS LS 013355 |
| QUALCOMM Incorporated vs. URBAN OUTFITTERS | QUALCOMM Incorporated vs. Hyster Yale Materials Handling | QUALCOMM Incorporated vs. Gamma Communications plc | QUALCOMM Incorporated vs. G III APPAREL GROUP |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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