Correlation Between Nordic Semiconductor and Bien Sparebank
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Bien Sparebank 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 Bien Sparebank 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 Bien Sparebank ASA, you can compare the effects of market volatilities on Nordic Semiconductor and Bien Sparebank 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 Bien Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Bien Sparebank.
Diversification Opportunities for Nordic Semiconductor and Bien Sparebank
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and Bien is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Bien Sparebank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bien Sparebank ASA 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 Bien Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bien Sparebank ASA has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Bien Sparebank go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Bien Sparebank
Assuming the 90 days trading horizon Nordic Semiconductor ASA is expected to under-perform the Bien Sparebank. In addition to that, Nordic Semiconductor is 2.95 times more volatile than Bien Sparebank ASA. It trades about 0.0 of its total potential returns per unit of risk. Bien Sparebank ASA is currently generating about 0.07 per unit of volatility. If you would invest 8,649 in Bien Sparebank ASA on September 1, 2024 and sell it today you would earn a total of 3,751 from holding Bien Sparebank ASA or generate 43.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. Bien Sparebank ASA
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Bien Sparebank ASA |
Nordic Semiconductor and Bien Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Bien Sparebank
The main advantage of trading using opposite Nordic Semiconductor and Bien Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Bien Sparebank 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 Bien Sparebank will offset losses from the drop in Bien Sparebank's long position.| Nordic Semiconductor vs. Storebrand ASA | Nordic Semiconductor vs. DnB ASA | Nordic Semiconductor vs. Telenor ASA | Nordic Semiconductor vs. Kongsberg Gruppen ASA |
| Bien Sparebank vs. Lea Bank ASA | Bien Sparebank vs. Romerike Sparebank | Bien Sparebank vs. Elkem ASA | Bien Sparebank vs. Integrated Wind Solutions |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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