Correlation Between Nordic Semiconductor and Sporttotal
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Sporttotal 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 Sporttotal 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 Sporttotal AG, you can compare the effects of market volatilities on Nordic Semiconductor and Sporttotal 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 Sporttotal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Sporttotal.
Diversification Opportunities for Nordic Semiconductor and Sporttotal
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nordic and Sporttotal is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Sporttotal AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sporttotal AG 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 Sporttotal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sporttotal AG has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Sporttotal go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Sporttotal
Assuming the 90 days horizon Nordic Semiconductor ASA is expected to generate 0.42 times more return on investment than Sporttotal. However, Nordic Semiconductor ASA is 2.38 times less risky than Sporttotal. It trades about -0.34 of its potential returns per unit of risk. Sporttotal AG is currently generating about -0.23 per unit of risk. If you would invest 917.00 in Nordic Semiconductor ASA on August 28, 2024 and sell it today you would lose (116.00) from holding Nordic Semiconductor ASA or give up 12.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. Sporttotal AG
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Sporttotal AG |
Nordic Semiconductor and Sporttotal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Sporttotal
The main advantage of trading using opposite Nordic Semiconductor and Sporttotal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Sporttotal 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 Sporttotal will offset losses from the drop in Sporttotal'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 |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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