Correlation Between Nordic Semiconductor and Allient
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Allient 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 Allient 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 Allient, you can compare the effects of market volatilities on Nordic Semiconductor and Allient 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 Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Allient.
Diversification Opportunities for Nordic Semiconductor and Allient
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordic and Allient is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient 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 Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Allient go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Allient
Assuming the 90 days horizon Nordic Semiconductor ASA is expected to generate 2.68 times more return on investment than Allient. However, Nordic Semiconductor is 2.68 times more volatile than Allient. It trades about 0.22 of its potential returns per unit of risk. Allient is currently generating about -0.04 per unit of risk. If you would invest 920.00 in Nordic Semiconductor ASA on November 9, 2024 and sell it today you would earn a total of 299.00 from holding Nordic Semiconductor ASA or generate 32.5% 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. Allient
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Allient |
Nordic Semiconductor and Allient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Allient
The main advantage of trading using opposite Nordic Semiconductor and Allient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Allient 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 Allient will offset losses from the drop in Allient's long position.| Nordic Semiconductor vs. Synaptics Incorporated | Nordic Semiconductor vs. MACOM Technology Solutions | Nordic Semiconductor vs. Silicon Laboratories | Nordic Semiconductor vs. Power Integrations |
| Allient vs. Orbit Garant Drilling | Allient vs. Energold Drilling Corp | Allient vs. Lithium Americas Corp | Allient vs. Cabo Drilling Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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