Correlation Between Nordic Semiconductor and Oak Woods
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Oak Woods 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 Oak Woods 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 Oak Woods Acquisition, you can compare the effects of market volatilities on Nordic Semiconductor and Oak Woods 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 Oak Woods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Oak Woods.
Diversification Opportunities for Nordic Semiconductor and Oak Woods
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nordic and Oak is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Oak Woods Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Woods Acquisition 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 Oak Woods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Woods Acquisition has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Oak Woods go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Oak Woods
Assuming the 90 days horizon Nordic Semiconductor ASA is expected to generate 4.35 times more return on investment than Oak Woods. However, Nordic Semiconductor is 4.35 times more volatile than Oak Woods Acquisition. It trades about 0.1 of its potential returns per unit of risk. Oak Woods Acquisition is currently generating about 0.1 per unit of risk. If you would invest 954.00 in Nordic Semiconductor ASA on November 5, 2024 and sell it today you would earn a total of 56.00 from holding Nordic Semiconductor ASA or generate 5.87% 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. Oak Woods Acquisition
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Oak Woods Acquisition |
Nordic Semiconductor and Oak Woods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Oak Woods
The main advantage of trading using opposite Nordic Semiconductor and Oak Woods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Oak Woods 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 Oak Woods will offset losses from the drop in Oak Woods' long position.| Nordic Semiconductor vs. Synaptics Incorporated | Nordic Semiconductor vs. MACOM Technology Solutions | Nordic Semiconductor vs. Silicon Laboratories | Nordic Semiconductor vs. Power Integrations |
| Oak Woods vs. United Natural Foods | Oak Woods vs. Aldel Financial II | Oak Woods vs. WK Kellogg Co | Oak Woods vs. Astral Foods Limited |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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