Correlation Between Nordic Semiconductor and Nordhealth
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Nordhealth 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 Nordhealth 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 Nordhealth AS, you can compare the effects of market volatilities on Nordic Semiconductor and Nordhealth 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 Nordhealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Nordhealth.
Diversification Opportunities for Nordic Semiconductor and Nordhealth
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nordic and Nordhealth is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Nordhealth AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordhealth AS 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 Nordhealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordhealth AS has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Nordhealth go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Nordhealth
Assuming the 90 days trading horizon Nordic Semiconductor ASA is expected to under-perform the Nordhealth. But the stock apears to be less risky and, when comparing its historical volatility, Nordic Semiconductor ASA is 1.44 times less risky than Nordhealth. The stock trades about -0.06 of its potential returns per unit of risk. The Nordhealth AS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,300 in Nordhealth AS on August 29, 2024 and sell it today you would earn a total of 1,000.00 from holding Nordhealth AS or generate 30.3% 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. Nordhealth AS
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Nordhealth AS |
Nordic Semiconductor and Nordhealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Nordhealth
The main advantage of trading using opposite Nordic Semiconductor and Nordhealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Nordhealth 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 Nordhealth will offset losses from the drop in Nordhealth's long position.| Nordic Semiconductor vs. REC Silicon ASA | Nordic Semiconductor vs. Aker Horizons AS | Nordic Semiconductor vs. Saga Pure 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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