Correlation Between Nordic Semiconductor and Grong Sparebank
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Grong 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 Grong 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 Grong Sparebank, you can compare the effects of market volatilities on Nordic Semiconductor and Grong 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 Grong Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Grong Sparebank.
Diversification Opportunities for Nordic Semiconductor and Grong Sparebank
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nordic and Grong is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Grong Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grong Sparebank 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 Grong Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grong Sparebank has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Grong Sparebank go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Grong Sparebank
Assuming the 90 days trading horizon Nordic Semiconductor ASA is expected to under-perform the Grong Sparebank. In addition to that, Nordic Semiconductor is 3.38 times more volatile than Grong Sparebank. It trades about -0.12 of its total potential returns per unit of risk. Grong Sparebank is currently generating about 0.01 per unit of volatility. If you would invest 14,900 in Grong Sparebank on September 2, 2024 and sell it today you would earn a total of 96.00 from holding Grong Sparebank or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. Grong Sparebank
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Grong Sparebank |
Nordic Semiconductor and Grong Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Grong Sparebank
The main advantage of trading using opposite Nordic Semiconductor and Grong Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Grong 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 Grong Sparebank will offset losses from the drop in Grong 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 |
| Grong Sparebank vs. Sparebank 1 SMN | Grong Sparebank vs. Sparebank 1 Nord Norge | Grong Sparebank vs. Sparebanken Vest | Grong Sparebank vs. Sparebank 1 Ostfold |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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