Correlation Between Nordic Semiconductor and Alvotech
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and Alvotech 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 Alvotech 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 Alvotech, you can compare the effects of market volatilities on Nordic Semiconductor and Alvotech 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 Alvotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and Alvotech.
Diversification Opportunities for Nordic Semiconductor and Alvotech
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nordic and Alvotech is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and Alvotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvotech 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 Alvotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvotech has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and Alvotech go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and Alvotech
Assuming the 90 days horizon Nordic Semiconductor is expected to generate 2.88 times less return on investment than Alvotech. In addition to that, Nordic Semiconductor is 1.66 times more volatile than Alvotech. It trades about 0.01 of its total potential returns per unit of risk. Alvotech is currently generating about 0.05 per unit of volatility. If you would invest 823.00 in Alvotech on August 31, 2024 and sell it today you would earn a total of 352.00 from holding Alvotech or generate 42.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. Alvotech
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| Alvotech |
Nordic Semiconductor and Alvotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and Alvotech
The main advantage of trading using opposite Nordic Semiconductor and Alvotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, Alvotech 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 Alvotech will offset losses from the drop in Alvotech's long position.| Nordic Semiconductor vs. Power Integrations | Nordic Semiconductor vs. MACOM Technology Solutions | Nordic Semiconductor vs. Intchains Group Limited | Nordic Semiconductor vs. Vishay Intertechnology |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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