Correlation Between Nordic Semiconductor and Gjensidige Forsikring
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Gjensidige Forsikring 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 Gjensidige Forsikring 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 Gjensidige Forsikring ASA, you can compare the effects of market volatilities on Nordic Semiconductor and Gjensidige Forsikring 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 Gjensidige Forsikring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Gjensidige Forsikring.
Diversification Opportunities for Nordic Semiconductor and Gjensidige Forsikring
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordic and Gjensidige is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Gjensidige Forsikring ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gjensidige Forsikring 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 Gjensidige Forsikring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gjensidige Forsikring ASA has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Gjensidige Forsikring go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Gjensidige Forsikring
Assuming the 90 days trading horizon Nordic Semiconductor is expected to generate 1.12 times less return on investment than Gjensidige Forsikring. In addition to that, Nordic Semiconductor is 1.45 times more volatile than Gjensidige Forsikring ASA. It trades about 0.12 of its total potential returns per unit of risk. Gjensidige Forsikring ASA is currently generating about 0.19 per unit of volatility. If you would invest 19,320 in Gjensidige Forsikring ASA on September 12, 2024 and sell it today you would earn a total of 980.00 from holding Gjensidige Forsikring ASA or generate 5.07% 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. Gjensidige Forsikring ASA
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Gjensidige Forsikring ASA |
Nordic Semiconductor and Gjensidige Forsikring Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Gjensidige Forsikring
The main advantage of trading using opposite Nordic Semiconductor and Gjensidige Forsikring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Gjensidige Forsikring 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 Gjensidige Forsikring will offset losses from the drop in Gjensidige Forsikring's long position.| Nordic Semiconductor vs. Storebrand ASA | Nordic Semiconductor vs. DnB ASA | Nordic Semiconductor vs. Telenor ASA | Nordic Semiconductor vs. Kongsberg Gruppen ASA |
| Gjensidige Forsikring vs. DnB ASA | Gjensidige Forsikring vs. Storebrand ASA | Gjensidige Forsikring vs. Orkla ASA | Gjensidige Forsikring vs. Telenor 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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