Correlation Between Nordic Semiconductor and Nidaros Sparebank
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Nidaros 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 Nidaros 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 Nidaros Sparebank, you can compare the effects of market volatilities on Nordic Semiconductor and Nidaros 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 Nidaros Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Nidaros Sparebank.
Diversification Opportunities for Nordic Semiconductor and Nidaros Sparebank
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and Nidaros is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Nidaros Sparebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nidaros 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 Nidaros Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nidaros Sparebank has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Nidaros Sparebank go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Nidaros Sparebank
Assuming the 90 days trading horizon Nordic Semiconductor ASA is expected to under-perform the Nidaros Sparebank. In addition to that, Nordic Semiconductor is 2.34 times more volatile than Nidaros Sparebank. It trades about 0.0 of its total potential returns per unit of risk. Nidaros Sparebank is currently generating about 0.01 per unit of volatility. If you would invest 9,567 in Nidaros Sparebank on September 1, 2024 and sell it today you would earn a total of 433.00 from holding Nidaros Sparebank or generate 4.53% 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. Nidaros Sparebank
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Nidaros Sparebank |
Nordic Semiconductor and Nidaros Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Nidaros Sparebank
The main advantage of trading using opposite Nordic Semiconductor and Nidaros Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Nidaros 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 Nidaros Sparebank will offset losses from the drop in Nidaros 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 |
| Nidaros Sparebank vs. Sparebank 1 SMN | Nidaros Sparebank vs. Sparebank 1 Nord Norge | Nidaros Sparebank vs. Sparebanken Vest | Nidaros 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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