Correlation Between Nordic Semiconductor and Storebrand ASA
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Storebrand ASA 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 Storebrand ASA 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 Storebrand ASA, you can compare the effects of market volatilities on Nordic Semiconductor and Storebrand ASA 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 Storebrand ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Storebrand ASA.
Diversification Opportunities for Nordic Semiconductor and Storebrand ASA
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nordic and Storebrand is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Storebrand ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storebrand 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 Storebrand ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Storebrand ASA has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Storebrand ASA go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Storebrand ASA
Assuming the 90 days trading horizon Nordic Semiconductor ASA is expected to under-perform the Storebrand ASA. In addition to that, Nordic Semiconductor is 1.36 times more volatile than Storebrand ASA. It trades about -0.2 of its total potential returns per unit of risk. Storebrand ASA is currently generating about -0.09 per unit of volatility. If you would invest 12,770 in Storebrand ASA on August 28, 2024 and sell it today you would lose (390.00) from holding Storebrand ASA or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. Storebrand ASA
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Storebrand ASA |
Nordic Semiconductor and Storebrand ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Storebrand ASA
The main advantage of trading using opposite Nordic Semiconductor and Storebrand ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Storebrand ASA 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 Storebrand ASA will offset losses from the drop in Storebrand ASA'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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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