Correlation Between Nordic Semiconductor and Dolphin Drilling
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Dolphin Drilling 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 Dolphin Drilling 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 Dolphin Drilling AS, you can compare the effects of market volatilities on Nordic Semiconductor and Dolphin Drilling 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 Dolphin Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Dolphin Drilling.
Diversification Opportunities for Nordic Semiconductor and Dolphin Drilling
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordic and Dolphin is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Dolphin Drilling AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolphin Drilling 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 Dolphin Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolphin Drilling has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Dolphin Drilling go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Dolphin Drilling
Assuming the 90 days trading horizon Nordic Semiconductor ASA is expected to generate 0.51 times more return on investment than Dolphin Drilling. However, Nordic Semiconductor ASA is 1.94 times less risky than Dolphin Drilling. It trades about -0.23 of its potential returns per unit of risk. Dolphin Drilling AS is currently generating about -0.18 per unit of risk. If you would invest 10,870 in Nordic Semiconductor ASA on September 1, 2024 and sell it today you would lose (976.00) from holding Nordic Semiconductor ASA or give up 8.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. Dolphin Drilling AS
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Dolphin Drilling |
Nordic Semiconductor and Dolphin Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Dolphin Drilling
The main advantage of trading using opposite Nordic Semiconductor and Dolphin Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Dolphin Drilling 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 Dolphin Drilling will offset losses from the drop in Dolphin Drilling's long position.| Nordic Semiconductor vs. Storebrand ASA | Nordic Semiconductor vs. DnB ASA | Nordic Semiconductor vs. Telenor ASA | Nordic Semiconductor vs. Kongsberg Gruppen ASA |
| Dolphin Drilling vs. Shelf Drilling | Dolphin Drilling vs. BW Offshore | Dolphin Drilling vs. Subsea 7 SA | Dolphin Drilling vs. Elkem ASA |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |