Correlation Between Nordic Semiconductor and BrainChip Holdings
Can any of the company-specific risk be diversified away by investing in both Nordic Semiconductor and BrainChip Holdings 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 BrainChip Holdings 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 BrainChip Holdings, you can compare the effects of market volatilities on Nordic Semiconductor and BrainChip Holdings 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 BrainChip Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic Semiconductor and BrainChip Holdings.
Diversification Opportunities for Nordic Semiconductor and BrainChip Holdings
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nordic and BrainChip is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Nordic Semiconductor ASA and BrainChip Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrainChip Holdings 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 BrainChip Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrainChip Holdings has no effect on the direction of Nordic Semiconductor i.e., Nordic Semiconductor and BrainChip Holdings go up and down completely randomly.
Pair Corralation between Nordic Semiconductor and BrainChip Holdings
Assuming the 90 days horizon Nordic Semiconductor is expected to generate 9.88 times less return on investment than BrainChip Holdings. But when comparing it to its historical volatility, Nordic Semiconductor ASA is 1.83 times less risky than BrainChip Holdings. It trades about 0.0 of its potential returns per unit of risk. BrainChip Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 32.00 in BrainChip Holdings on November 27, 2024 and sell it today you would lose (13.00) from holding BrainChip Holdings or give up 40.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.95% |
| Values | Daily Returns |
Nordic Semiconductor ASA vs. BrainChip Holdings
Performance |
| Timeline |
| Nordic Semiconductor ASA |
| BrainChip Holdings |
Nordic Semiconductor and BrainChip Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic Semiconductor and BrainChip Holdings
The main advantage of trading using opposite Nordic Semiconductor and BrainChip Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic Semiconductor position performs unexpectedly, BrainChip Holdings 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 BrainChip Holdings will offset losses from the drop in BrainChip Holdings' long position.| Nordic Semiconductor vs. Nordic Semiconductor ASA | Nordic Semiconductor vs. STMicroelectronics NV | Nordic Semiconductor vs. Rohm Co Ltd | Nordic Semiconductor vs. Asm Pacific Technology |
| BrainChip Holdings vs. Sitime | BrainChip Holdings vs. Alpha and Omega | BrainChip Holdings vs. MaxLinear | BrainChip Holdings vs. NVE Corporation |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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